Should You Buy Cascade Bancorp (CACB)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).

Let’s go over hedge fund activity in other stocks similar to Cascade Bancorp (NASDAQ:CACB). These stocks are Revance Therapeutics Inc (NASDAQ:RVNC), American Midstream Partners LP (NYSE:AMID), Ring Energy Inc (NYSEMKT:REI), and Hawkins, Inc. (NASDAQ:HWKN). This group of stocks’ market caps resemble CACB’s market cap.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $101 million in CACB’s case. Ring Energy Inc (NYSEMKT:REI) is the most popular stock in this table. On the other hand Revance Therapeutics Inc (NASDAQ:RVNC) is the least popular one with only 4 bullish hedge fund positions. Cascade Bancorp (NASDAQ:CACB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard REI might be a better candidate to consider taking a long position in.

Disclosure: None