Should You Avoid Incontact Inc (SAAS)?

Since Incontact Inc (NASDAQ:SAAS) has weathered a decline in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedge funds that elected to cut their full holdings last quarter. It’s worth mentioning that Alec Litowitz and Ross Laser’s Magnetar Capital cashed in the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising close to $40.6 million in stock, and Matthew A. Weatherbie’s Weatherbie Capital was right behind this move, as the fund said goodbye to about $6.4 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Incontact Inc (NASDAQ:SAAS) but similarly valued. These stocks are Web.com Group Inc (NASDAQ:WEB), GTT Communications Inc (NYSE:GTT), Kindred Healthcare, Inc. (NYSE:KND), and Pengrowth Energy Corp (USA) (NYSE:PGH). This group of stocks’ market valuations are closest to SAAS’s market valuation.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $200 million in SAAS’s case. Web.com Group Inc (NASDAQ:WEB) is the most popular stock in this table. On the other hand Pengrowth Energy Corp (USA) (NYSE:PGH) is the least popular one with only 7 bullish hedge fund positions. Incontact Inc (NASDAQ:SAAS) 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 WEB might be a better candidate to consider taking a long position in.

Disclosure: none.