We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium 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 here 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 Citadel Investment Group).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Orion Energy Systems, Inc. (NASDAQ:OESX) but similarly valued. We will take a look at Aeropostale, Inc. (NYSE:ARO), Cosi Inc (NASDAQ:COSI), CHC Group Ltd (NYSE:HELI), and Eleven Biotherapeutics Inc (NASDAQ:EBIO). This group of stocks’ market values match Orion Energy Systems, Inc. (NASDAQ:OSEX)’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $9 million in Orion Energy Systems, Inc. (NASDAQ:OSEX)’s case. Aeropostale, Inc. (NYSE:ARO) is the most popular stock in this table. On the other hand, Cosi Inc (NASDAQ:COSI) is the least popular one with only 4 bullish hedge fund positions. Orion Energy Systems, Inc. (NASDAQ:OESX) 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, Aeropostale, Inc. (NYSE:ARO) might be a better candidate to consider a long position.