We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: AQR Capital 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 PCYG as a viable investment and initiated a position in the stock.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Park City Group, Inc. (NASDAQ:PCYG) but similarly valued. We will take a look at Synthetic Biologics Inc (NASDAQ:SYN), NTELOS Holdings Corp. (NASDAQ:NTLS), Nivalis Therapeutics Inc (NASDAQ:NVLS), and Preformed Line Products Company (NASDAQ:PLPC). This group of stocks’ market caps resemble PCYG’s market cap.
|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 11 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $5 million in PCYG’s case. Nivalis Therapeutics Inc (NASDAQ:NVLS) is the most popular stock in this table. On the other hand Preformed Line Products Company (NASDAQ:PLPC) is the least popular one with only 4 bullish hedge fund positions. Park City Group, Inc. (NASDAQ:PCYG) 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 NVLS might be a better candidate to consider a long position.