Do Hedge Funds Love Preferred Bank (PFBC)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: McKinley Capital Management. 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 only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Arrowstreet Capital).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Preferred Bank (NASDAQ:PFBC) but similarly valued. We will take a look at Minerva Neurosciences Inc (NASDAQ:NERV), Trupanion Inc (NYSE:TRUP), Camden National Corporation (NASDAQ:CAC), and ArcBest Corp (NASDAQ:ARCB). This group of stocks’ market caps are closest to PFBC’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $50 million in PFBC’s case. ArcBest Corp (NASDAQ:ARCB) is the most popular stock in this table. On the other hand Camden National Corporation (NASDAQ:CAC) is the least popular one with only 6 bullish hedge fund positions. Preferred Bank (NASDAQ:PFBC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ARCB might be a better candidate to consider taking a long position in.

Disclosure: None