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 in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was PEAK6 Capital Management).
Let’s go over hedge fund activity in other stocks similar to Trecora Resources (NYSE:TREC). These stocks are Heritage Oaks Bancorp (NASDAQ:HEOP), Orchids Paper Products Company (NYSEMKT:TIS), Carolina Financial Corp (NASDAQ:CARO), and Vince Holding Corp (NYSE:VNCE). This group of stocks’ market values resemble TREC’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 5 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $10 million in TREC’s case. Vince Holding Corp (NYSE:VNCE) is the most popular stock in this table. On the other hand Orchids Paper Products Company (NYSEMKT:TIS) is the least popular one with only 2 bullish hedge fund positions. Trecora Resources (NYSE:TREC) 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 VNCE might be a better candidate to consider taking a long position in.