We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: LMR Partners. 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 Renaissance Technologies).
Let’s now review hedge fund activity in other stocks similar to Fenix Parts Inc (NASDAQ:FENX). These stocks are Pieris Pharmaceuticals Inc (NASDAQ:PIRS), Rocky Brands, Inc. (NASDAQ:RCKY), Arotech Corporation (NASDAQ:ARTX), and North American Energy Partners Inc.(USA) (NYSE:NOA). This group of stocks’ market values resemble FENX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PIRS | 6 | 18469 | 1 |
| RCKY | 4 | 1947 | 0 |
| ARTX | 3 | 3854 | -1 |
| NOA | 5 | 14994 | -3 |
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 $10 million. That figure was $22 million in FENX’s case. Pieris Pharmaceuticals Inc (NASDAQ:PIRS) is the most popular stock in this table. On the other hand Arotech Corporation (NASDAQ:ARTX) is the least popular one with only 3 bullish hedge fund positions. Fenix Parts Inc (NASDAQ:FENX) 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 PIRS might be a better candidate to consider taking a long position in.
Disclosure: None
