Hedge Funds Aren’t Crazy About KAR Auction Services Inc (KAR)

Judging by the fact that KAR Auction Services Inc (NYSE:KAR) has encountered a decline in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of fund managers that decided to sell off their full holdings by the end of the third quarter. Intriguingly, Daniel S. Och’s OZ Management cashed in the biggest position of all the hedgies tracked by Insider Monkey, valued at an estimated $142.4 million in stock, and Greg Poole’s Echo Street Capital Management was right behind this move, as the fund sold off about $7.5 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as KAR Auction Services Inc (NYSE:KAR) but similarly valued. These stocks are Arista Networks Inc (NYSE:ANET), TIM Participacoes SA (ADR) (NYSE:TSU), Liberty Property Trust (NYSE:LPT), and Pinnacle Foods Inc (NYSE:PF). This group of stocks’ market caps are similar to KAR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ANET 17 225054 0
TSU 13 327137 -3
LPT 14 77164 -1
PF 41 1449617 8

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $520 million. That figure was $911 million in KAR’s case. Pinnacle Foods Inc (NYSE:PF) is the most popular stock in this table. On the other hand TIM Participacoes SA (ADR) (NYSE:TSU) is the least popular one with only 13 bullish hedge fund positions. KAR Auction Services Inc (NYSE:KAR) 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 PF might be a better candidate to consider taking a long position in.

Disclosure: None