Is Concho Resources Inc. (CXO) A Good Stock To Buy Right Now?

Judging by the fact that Concho Resources Inc. (NYSE:CXO) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of fund managers who were dropping their full holdings by the end of the third quarter. At the top of the heap, Todd J. Kantor’s Encompass Capital Advisors sold off the largest position of all the hedgies watched by Insider Monkey, valued at an estimated $17 million in stock. Wayne Cooperman’s fund, Cobalt Capital Management, also dropped its bet, about $15.1 million worth of CXO shares. These transactions are intriguing to say the least, as total hedge fund interest fell by 4 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Concho Resources Inc. (NYSE:CXO) but similarly valued. These stocks are Shinhan Financial (NYSE:SHG), POSCO (NYSE:PKX), Noble Energy (NYSE:NBL), and Ctrip.com (NASDAQ:CTRP). This group of stocks’ market caps resemble CXO’s market cap.

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 $972 million. That figure was $714 million in CXO’s case. Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG) is the least popular one with only 7 bullish hedge fund positions. Concho Resources Inc. (NYSE:CXO) 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 CTRP might be a better candidate to consider a long position.

Disclosure: none.