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Should You Buy QAD Inc. (QADA)?

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Portolan Capital Management created the largest position in QAD Inc. (NASDAQ:QADA). Portolan Capital Management had $2.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.4 million position during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.

Let’s go over hedge fund activity in other stocks similar to QAD Inc. (NASDAQ:QADA). We will take a look at Myokardia Inc (NASDAQ:MYOK), Barnes & Noble Education Inc (NYSE:BNED), Triton International Limited(NYSE:TRTN), and Ennis, Inc. (NYSE:EBF). This group of stocks’ market caps are closest to QADA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MYOK 15 81279 9
BNED 14 94174 -2
TRTN 12 16853 3
EBF 13 35161 0

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $53 million in QADA’s case. Myokardia Inc (NASDAQ:MYOK) is the most popular stock in this table. On the other hand Triton International Limited(NYSE:TRTN) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks QAD Inc. (NASDAQ:QADA) is even less popular than TRTN. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.