Should You Avoid Allied Motion Technologies, Inc. (AMOT)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Tudor Investment Corp. 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 none of the 700+ hedge funds tracked by Insider Monkey identified AMOT as a viable investment and initiated a position in the stock.

Let’s now review hedge fund activity in other stocks similar to Allied Motion Technologies, Inc. (NASDAQ:AMOT). We will take a look at Enphase Energy Inc (NASDAQ:ENPH), Bill Barrett Corporation (NYSE:BBG), Care.com Inc (NYSE:CRCM), and Cumulus Media Inc (NASDAQ:CMLS). All of these stocks’ market caps match AMOT’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was just $5 million in AMOT’s case. Cumulus Media Inc (NASDAQ:CMLS) is the most popular stock in this table. On the other hand, Care.com Inc (NYSE:CRCM) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Allied Motion Technologies, Inc. (NASDAQ:AMOT) is even less popular than CRCM. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed 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.