Washington Federal Inc. (WAFD): Are Hedge Funds Right About This Stock?

As industrywide interest jumped, specific money managers have jumped into Washington Federal Inc. (NASDAQ:WAFD) headfirst. Alpenglow Capital, led by Sharif Siddiqui, created the most outsized position in Washington Federal Inc. (NASDAQ:WAFD). According to its latest 13F filing, the fund had $3.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $2.7 million position during the quarter. The only other fund with a new position in the stock is Solomon Kumin’s Folger Hill Asset Management.

Let’s check out hedge fund activity in other stocks similar to Washington Federal Inc. (NASDAQ:WAFD). We will take a look at Drew Industries, Inc. (NYSE:DW), Whiting Petroleum Corp (NYSE:WLL), The Cheesecake Factory Incorporated (NASDAQ:CAKE), and Ambarella Inc (NASDAQ:AMBA). This group of stocks’ market valuations resemble WAFD’s market valuation.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $327 million. That figure was $33 million in WAFD’s case. Whiting Petroleum Corp (NYSE:WLL) is the most popular stock in this table. On the other hand Ambarella Inc (NASDAQ:AMBA) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Washington Federal Inc. (NASDAQ:WAFD) is even less popular than AMBA. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: none.