Is China Yuchai International Limited (CYD) A Good Stock To Buy?

We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: First Eagle Investment 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 CYD as a viable investment and initiated a position in the stock.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as China Yuchai International Limited (NYSE:CYD) but similarly valued. We will take a look at Resolute Forest Products Inc (NYSE:RFP), Textainer Group Holdings Limited (NYSE:TGH), Ladenburg Thalmann Financial Services (NYSEAMEX:LTS), and Gener8 Maritime Inc (NYSE:GNRT). This group of stocks’ market values match CYD’s market value.

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 $106 million. That figure was $47 million in CYD’s case. Resolute Forest Products Inc (NYSE:RFP) is the most popular stock in this table. On the other hand Textainer Group Holdings Limited (NYSE:TGH) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks China Yuchai International Limited (NYSE:CYD) is only as popular as TGH and LTS. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.

Disclosure: None