Is Guaranty Bancorp (GBNK) A Good Stock To Buy?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Mendon Capital Advisors. 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 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Guaranty Bancorp (NASDAQ:GBNK) but similarly valued. These stocks are Ascendis Pharma A/S (NASDAQ:ASND), Overstock.com, Inc. (NASDAQ:OSTK), Myers Industries, Inc. (NYSE:MYE), and Axcelis Technologies Inc (NASDAQ:ACLS). This group of stocks’ market valuations match GBNK’s market valuation.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $70 million in GBNK’s case. Ascendis Pharma A/S (NASDAQ:ASND) is the most popular stock in this table. On the other hand Myers Industries, Inc. (NYSE:MYE) is the least popular one with only 9 bullish hedge fund positions. Guaranty Bancorp (NASDAQ:GBNK) 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 ASND might be a better candidate to consider taking a long position in.

Disclosure: None