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VMware, Inc. (VMW): Are Hedge Funds Right About This Stock?

At the top of the heap, Christopher James’s Partner Fund Management cut the largest position of all the hedgies monitored by Insider Monkey, valued at an estimated $72.2 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also dropped its stock, about $14.3 million worth. These transactions are intriguing to say the least, 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 similar to VMware, Inc. (NYSE:VMW). These stocks are Raytheon Company (NYSE:RTN), Twenty-First Century Fox Inc (NASDAQ:FOXA), Northrop Grumman Corporation (NYSE:NOC), and T MOBILE US INC (NYSE:TMUS). All of these stocks’ market caps match VMW’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RTN 31 839028 -6
FOXA 56 4044012 -1
NOC 37 1985310 5
TMUS 54 3199501 -15

As you can see these stocks had an average of 44.5 hedge funds with bullish positions and the average amount invested in these stocks was $2517 million. That figure was $960 million in VMW’s case. Twenty-First Century Fox Inc (NASDAQ:FOXA) is the most popular stock in this table. On the other hand Raytheon Company (NYSE:RTN) is the least popular one with only 31 bullish hedge fund positions. VMware, Inc. (NYSE:VMW) 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 FOXA might be a better candidate to consider a long position.

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