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Should You Follow Hedge Funds Out of CDW Corp (CDW)?

Because CDW Corp (NASDAQ:CDW) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there exists a select few funds who were dropping their entire stakes in the third quarter. Intriguingly, Eli Cohen’s Crescent Park Management dropped the largest stake of the “upper crust” of funds monitored by Insider Monkey, worth about $17.8 million in stock, and George Hall’s Clinton Group was right behind this move, as the fund said goodbye to about $7.6 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 9 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as CDW Corp (NASDAQ:CDW) but similarly valued. We will take a look at RPM International Inc. (NYSE:RPM), The Middleby Corporation (NASDAQ:MIDD), DDR Corp (NYSE:DDR), and EnCana Corporation (USA) (NYSE:ECA). This group of stocks’ market values resemble CDW’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RPM 25 129774 4
MIDD 26 345362 7
DDR 18 207446 2
ECA 37 2159354 11

As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $710 million. That figure was $305 million in CDW’s case. EnCana Corporation (USA) (NYSE:ECA) is the most popular stock in this table. On the other hand DDR Corp (NYSE:DDR) is the least popular one with only 18 bullish hedge fund positions. CDW Corp (NASDAQ:CDW) 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 pouring money into. In this regard ECA might be a better candidate to consider a long position in.

Disclosure: None

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