Should You Buy DHI Group Inc (DHX)?

We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: Stevens Capital Management. One hedge fund selling its entire position doesn’t always imply 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 the stock as a viable investment and initiated a position in the stock (that fund was Nine Chapters Capital Management).

Let’s also examine hedge fund activity in other stocks similar to DHI Group Inc (NYSE:DHX). We will take a look at Flexion Therapeutics Inc (NASDAQ:FLXN), Natural Health Trends Corp. (NASDAQ:NHTC), Bill Barrett Corporation (NYSE:BBG), and IXYS Corporation (NASDAQ:IXYS). This group of stocks’ market values match DHX’s market value.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $29 million in DHX’s case. Bill Barrett Corporation (NYSE:BBG) is the most popular stock in this table. On the other hand Flexion Therapeutics Inc (NASDAQ:FLXN) is the least popular one with only 8 bullish hedge fund positions. DHI Group Inc (NYSE:DHX) 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 BBG might be a better candidate to consider taking a long position in.

Disclosure: None