What Does Hedge Fund Sentiment Say About NetApp Inc. (NTAP)?

Since NetApp Inc. (NASDAQ:NTAP) has experienced a decline in interest from hedge fund managers, logic holds that there were a few fund managers who sold off their entire stakes in the third quarter. At the top of the heap, Joel Greenblatt’s Gotham Asset Management dropped the biggest investment of the 700 funds tracked by Insider Monkey, totaling an estimated $33.9 million in stock. Ken Griffin’s fund, Citadel Investment Group, also said goodbye to its stock, about $10.1 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as NetApp Inc. (NASDAQ:NTAP) but similarly valued. These stocks are Masco Corporation (NYSE:MAS), Advanced Semiconductor Engineering (ADR) (NYSE:ASX), LKQ Corporation (NASDAQ:LKQ), and Western Gas Equity Partners LP (NYSE:WGP). This group of stocks’ market values are similar to NTAP’s market value.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $545 million. That figure was $318 million in NTAP’s case. Masco Corporation (NYSE:MAS) is the most popular stock in this table. On the other hand Western Gas Equity Partners LP (NYSE:WGP) is the least popular one with only 9 bullish hedge fund positions. NetApp Inc. (NASDAQ:NTAP) 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 MAS might be a better candidate to consider a long position.