Is Park City Group, Inc. (PCYG) A Good Stock To Buy?

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

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Park City Group, Inc. (NASDAQ:PCYG) but similarly valued. We will take a look at Synthetic Biologics Inc (NASDAQ:SYN), NTELOS Holdings Corp. (NASDAQ:NTLS), Nivalis Therapeutics Inc (NASDAQ:NVLS), and Preformed Line Products Company (NASDAQ:PLPC). This group of stocks’ market caps resemble PCYG’s market cap.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $5 million in PCYG’s case. Nivalis Therapeutics Inc (NASDAQ:NVLS) is the most popular stock in this table. On the other hand Preformed Line Products Company (NASDAQ:PLPC) is the least popular one with only 4 bullish hedge fund positions. Park City Group, Inc. (NASDAQ:PCYG) 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 NVLS might be a better candidate to consider a long position.