What Hedge Funds Think About Quest Resource Holding Corp (QRHC)

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Harvest Capital Strategies. 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 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Renaissance Technologies).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Quest Resource Holding Corp (NASDAQ:QRHC) but similarly valued. We will take a look at ReachLocal Inc. (NASDAQ:RLOC), Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS), Support.com, Inc. (NASDAQ:SPRT), and American Superconductor Corporation (NASDAQ:AMSC). This group of stocks’ market caps are closest to QRHC’s market cap.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $9 million, compared to $3 million in QRHC’s case. Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) is the most popular stock in this table, while ReachLocal Inc. (NASDAQ:RLOC) is the least popular one with only 6 bullish hedge fund positions. Quest Resource Holding Corp (NASDAQ:QRHC) 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 SNSS might be a better candidate to consider a long position.