Is HC2 Holdings Inc (HCHC) A Good Stock To Buy?

Because HC2 Holdings Inc (NYSEMKT:HCHC) has experienced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of funds who sold off their entire stakes heading into Q4. At the top of the heap, Israel Englander’s Millennium Management dumped the largest stake of the 700 funds tracked by Insider Monkey, valued at close to $1 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also dumped its stock, about $0.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as HC2 Holdings Inc (NYSEMKT:HCHC) but similarly valued. These stocks are Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL), Graham Corporation (NYSE:GHM), T2 Biosystems Inc (NASDAQ:TTOO), and Pennantpark Floating Rate Capital Ltd (NASDAQ:PFLT). This group of stocks’ market caps resemble HCHC’s market cap.

As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $47 million in HCHC’s case. Graham Corporation (NYSE:GHM) is the most popular stock in this table. On the other hand Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL) is the least popular one with only 7 bullish hedge fund positions. HC2 Holdings Inc (NYSEMKT:HCHC) 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 GHM might be a better candidate to consider a long position.