Western Digital Corp. (WDC): Are Hedge Funds Right About This Stock?

Judging by the fact that Western Digital Corp. (NASDAQ:WDC) has witnessed a decline in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedgies that slashed their full holdings heading into Q4. At the top of the heap, Jim Simons’ Renaissance Technologies dropped the largest stake of all the hedgies watched by Insider Monkey, totaling about $3 million in stock. Andy Redleaf’s fund, Whitebox Advisors, also sold off its stock, about $0.8 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to Western Digital Corp. (NASDAQ:WDC). These stocks are Installed Building Products Inc (NYSE:IBP), Ehi Car Services Ltd (ADR) (NYSE:EHIC), New Mountain Finance Corp. (NYSE:NMFC), and Brooks Automation, Inc. (USA) (NASDAQ:BRKS). This group of stocks’ market values resemble WD’s market value.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $36 million in WD’s case. Installed Building Products Inc (NYSE:IBP) is the most popular stock in this table with 19 funds reporting stakes. On the other hand Ehi Car Services Ltd (ADR) (NYSE:EHIC) is the least popular one with only 5 bullish hedge fund positions. Western Digital Corp. (NASDAQ:WDC) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard IBP might be a better candidate to consider a long position.