Is PowerShares QQQ Trust, Series 1 (ETF) (QQQ) A Good Stock To Buy?

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Ionic Capital Management, managed by Bart Baum, assembled the biggest call position in PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ). Ionic Capital Management had $41.8 million invested in the company at the end of the quarter. Sandler Capital Management also initiated a $36.1 million position during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management and James Melcher’s Balestra.

Let’s now take a look at hedge fund activity in other stocks similar to PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ). These stocks are LIBERTY GLOBAL PLC (NASDAQ:LBTYK), Delta Air Lines, Inc. (NYSE:DAL), JD.Com Inc (ADR) (NASDAQ:JD), and Stryker Corporation (NYSE:SYK). This group of stocks’ market valuations are similar to QQQ’s market valuation.

As you can see these stocks had an average of 74 hedge funds with bullish positions and the average amount invested in these stocks was $6.40 billion. That figure was $852 million in QQQ’s case. Delta Air Lines, Inc. (NYSE:DAL) is the most popular stock in this table. On the other hand Stryker Corporation (NYSE:SYK) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) is even less popular than SYK. Considering that hedge funds aren’t fond of this stock in relation to other companies covered in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.