Is Penske Automotive Group, Inc. (PAG) A Good Stock To Buy?

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Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cashed in their entire stakes in the stock during the third quarter. Interestingly, Edward Goodnow’s Goodnow Investment Group cashed in the largest stake of all the investors followed by Insider Monkey, comprising about $7 million in stock. Renaissance Technologies, one of the largest hedge funds in the world, cut its stock, about $3 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Penske Automotive Group, Inc. (NYSE:PAG) but similarly valued. These stocks are Hexcel Corporation (NYSE:HXL), White Mountains Insurance Group Ltd (NYSE:WTM), Credit Acceptance Corp. (NASDAQ:CACC), and Yamana Gold Inc. (USA) (NYSE:AUY). All of these stocks’ market caps are similar to PAG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HXL 12 60634 0
WTM 12 182441 1
CACC 24 795952 3
AUY 20 224711 -4

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $316 million. That figure was $73 million in PAG’s case. Credit Acceptance Corp. (NASDAQ:CACC) is the most popular stock in this table. On the other hand Hexcel Corporation (NYSE:HXL) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Penske Automotive Group, Inc. (NYSE:PAG) is as less popular than HXL. 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. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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