Some of These Investors May Regret Buying Into Ooma Inc (OOMA)’s IPO

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Let’s check out hedge fund activity in other stocks similar to Ooma Inc (NYSE:OOMA). We will take a look at Novatel Wireless Inc (NASDAQ:MIFI), Marin Software Inc (NYSE:MRIN), Morgans Hotel Group Co. (NASDAQ:MHGC), and Roundy’s Inc (NYSE:RNDY). All of these stocks’ market caps resemble OOMA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MIFI 8 8765 -1
MRIN 7 8711 1
MHGC 18 29484 -2
RNDY 6 4757 -5

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was also $13 million in OOMA’s case. Morgans Hotel Group Co. (NASDAQ:MHGC) is the most popular stock in this table. On the other hand Roundy’s Inc (NYSE:RNDY) is the least popular one with only 6 bullish hedge fund positions. Ooma Inc (NYSE:OOMA) 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 MHGC might be a better candidate to consider a long position in.

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