Do Hedge Funds Love Park-Ohio Holdings Corp. (PKOH)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Whitebox 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 here 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 Balyasny Asset Management).

Let’s also examine hedge fund activity in other stocks similar to Park-Ohio Holdings Corp. (NASDAQ:PKOH). These stocks are Citi Trends, Inc. (NASDAQ:CTRN), Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), First Foundation Inc (NASDAQ:FFWM), and Bazaarvoice Inc (NASDAQ:BV). This group of stocks’ market values resemble Park-Ohio Holdings Corp. (NASDAQ:PKOH)’s market value.

As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $32 million in Park-Ohio Holdings Corp. (NASDAQ:PKOH)’s case. Citi Trends, Inc. (NASDAQ:CTRN) is the most popular stock in this table. On the other hand, First Foundation Inc (NASDAQ:FFWM) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks, Park-Ohio Holdings Corp. (NASDAQ:PKOH) is even less popular than First Foundation Inc (NASDAQ:FFWM). 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.