Should You Buy Wix.Com Ltd (WIX)?

Due to the fact that Wix.Com Ltd (NASDAQ:WIX) has faced declining sentiment from the smart money, it’s safe to say that there is a sect of hedge funds that elected to cut their full holdings by the end of the third quarter. At the top of the heap, Alex Sacerdote’s Whale Rock Capital Management cut the biggest position of the 700 funds monitored by Insider Monkey, totaling $18.8 million in stock, and Josh Goldberg’s G2 Investment Partners Management was right behind this move, as the fund said goodbye to about $1.8 million worth of WIX shares. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Wix.Com Ltd (NASDAQ:WIX) but similarly valued. We will take a look at New Media Investment Group Inc (NYSE:NEWM), Customers Bancorp Inc (NASDAQ:CUBI), HealthStream, Inc. (NASDAQ:HSTM), and IntelliPharmaCeutics International Inc. (TSE:I). All of these stocks’ market caps match WIX’s market cap.

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 $81 million in WIX’s case. New Media Investment Group Inc (NYSE:NEWM) is the most popular stock in this table, while Customers Bancorp Inc (NASDAQ:CUBI) is the laggard with only 9 bullish hedge fund positions. Wix.Com Ltd (NASDAQ:WIX) is not the most popular stock in this group, but hedge fund interest is still above average. While we treat this as a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NEWM might be a better candidate to consider a long position.