Should You Buy Zillow Group, Inc. (Z)?

Judging by the fact that Zillow Group, Inc. (NASDAQ:Z) has witnessed no change in sentiment from the smart money, we look at a select few funds who sold off their full holdings last quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, worth close to $43.5 million in stock, and Brad Gerstner’s Altimeter Capital Management was right behind this move, as the fund dumped about $39.7 million worth of Zillow shares. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Zillow Group, Inc. (NASDAQ:Z) but similarly valued. We will take a look at Pilgrim’s Pride Corporation (NASDAQ:PPC), Align Technology, Inc. (NASDAQ:ALGN), CIT Group Inc. (NYSE:CIT), and Lamar Advertising Co (NASDAQ:LAMR). All of these stocks’ market caps are closest to Z’s market cap.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $599 million. That figure was $614 million in Z’s case. Align Technology, Inc. (NASDAQ:ALGN) is the most popular stock in this table. On the other hand Pilgrim’s Pride Corporation (NASDAQ:PPC) is the least popular one with only 21 bullish hedge fund positions. Zillow Group, Inc. (NASDAQ:Z) 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 ALGN might be a better candidate to consider a long position.

Disclosure: none.