Is Perceptron, Inc. (PRCP) A Good Stock To Buy?

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

Let’s now take a look at hedge fund activity in other stocks similar to Perceptron, Inc. (NASDAQ:PRCP). We will take a look at Northern Technologies International Corp (NASDAQ:NTIC), Inuvo, Inc. (NYSEAMEX:INUV), TransAct Technologies Incorporated (NASDAQ:TACT), and Arch Coal Inc (NYSE:ACI). All of these stocks’ market caps are similar to PRCP’s market cap.

As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million.That figure was $24 million in PRCP’s case. Arch Coal Inc (NYSE:ACI) is the most popular stock in this table. On the other hand Northern Technologies International Corp (NASDAQ:NTIC) is the least popular one with only 4 bullish hedge fund positions. Perceptron, Inc. (NASDAQ:PRCP) 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 ACI might be a better candidate to consider a long position.