Should You Buy Summit Materials Inc (SUM)?

Now, key money managers have been driving this bullishness. Roystone Capital Partners, managed by Richard Barrera, created the biggest position in Summit Materials Inc (NYSE:SUM). According to its latest 13F filing, the fund had $27.7 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also made a $9.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Alexander Mitchell’s Scopus Asset Management, Stuart J. Zimmer’s Zimmer Partners, and Philip Hempleman’s Ardsley Partners.

Let’s check out hedge fund activity in other stocks similar to Summit Materials Inc (NYSE:SUM). These stocks are Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), Lexington Realty Trust (NYSE:LXP), Lexmark International Inc (NYSE:LXK), and United Natural Foods, Inc. (NASDAQ:UNFI). This group of stocks’ market values resemble SUM’s market value.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $268 million. That figure was $471 million in SUM’s case. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) is the most popular stock in this table. On the other hand Lexington Realty Trust (NYSE:LXP) is the least popular one with only 16 bullish hedge fund positions. Summit Materials Inc (NYSE:SUM) 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 more hedge funds own. In this regard MDRX might be a better candidate to consider a long position in.

Disclosure: None