Should You Buy Medidata Solutions Inc (MDSO)?

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Moreover, there exists a select few hedgies that slashed their full holdings last quarter. Intriguingly, Clifford Fox’s Columbus Circle Investors dropped the largest stake of all the hedgies tracked by Insider Monkey, valued at close to $25.2 million in stock. Peter Muller’s fund, PDT Partners, also dumped its stock, about $2.7 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Medidata Solutions Inc (NASDAQ:MDSO) but similarly valued. These stocks are PriceSmart, Inc. (NASDAQ:PSMT), The Timken Company (NYSE:TKR), Domtar Corp (USA) (NYSE:UFS), and Covanta Holding Corporation (NYSE:CVA). This group of stocks’ market valuations match MDSO’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PSMT 12 47790 3
TKR 20 274701 -4
UFS 20 111838 2
CVA 19 364515 0

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $200 million. That figure was just $73 million in MDSO’s case. The Timken Company (NYSE:TKR) is the most popular stock in this table. On the other hand PriceSmart, Inc. (NASDAQ:PSMT) is the least popular one with only 12 bullish hedge fund positions. Medidata Solutions Inc (NASDAQ:MDSO) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TKR might be a better candidate to consider a long position.

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