Here is What Hedge Funds Think About Pacific Ethanol Inc (PEIX)

Judging by the fact that Pacific Ethanol Inc (NASDAQ:PEIX) has faced bearish sentiment from the smart money, logic holds that there were a few hedge funds that elected to cut their full holdings heading into Q4. At the top of the heap, Gifford Combs’ Dalton Investments cut the biggest investment of the 700 funds tracked by Insider Monkey, totaling about $15.4 million in stock. Remy Trafelet’s fund, Trafelet Capital, also said goodbye to its stock, about $10.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 5 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pacific Ethanol Inc (NASDAQ:PEIX) but similarly valued. We will take a look at KemPharm Inc (NASDAQ:KMPH), NeoPhotonics Corp (NYSE:NPTN), Oppenheimer Holdings Inc. (USA) (NYSE:OPY), and TechTarget Inc (NASDAQ:TTGT). This group of stocks’ market caps resemble PEIX’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $22 million in PEIX’s case. TechTarget Inc (NASDAQ:TTGT) is the most popular stock in this table, while KemPharm Inc (NASDAQ:KMPH) is the least popular one with only 8 bullish hedge fund positions. Pacific Ethanol Inc (NASDAQ:PEIX) 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 TTGT might be a better candidate to consider a long position.