We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Marshall Wace LLP. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was BlueCrest Capital Mgmt.).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Vectren Corporation (NYSE:VVC) but similarly valued. We will take a look at Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), Life Storage Inc (NYSE:LSI), Manhattan Associates, Inc. (NASDAQ:MANH), and Graco Inc. (NYSE:GGG). All of these stocks’ market caps are closest to VVC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GOLD | 18 | 179620 | 0 |
| LSI | 14 | 324991 | -8 |
| MANH | 16 | 205073 | -5 |
| GGG | 12 | 154364 | 1 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $216 million. That figure was $122 million in VVC’s case. Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) is the most popular stock in this table. On the other hand Graco Inc. (NYSE:GGG) is the least popular one with only 12 bullish hedge fund positions. Vectren Corporation (NYSE:VVC) 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 GOLD might be a better candidate to consider taking a long position in.
Disclosure: none
