Is Pinnacle West Capital Corporation (PNW) A Good Stock To Buy?

Seeing as Pinnacle West Capital Corporation (NYSE:PNW) has witnessed bearish sentiment from hedge fund managers, logic holds that there were a few money managers that slashed their entire stakes by the end of the third quarter. Intriguingly, Jonathan Barrett and Paul Segal’s Luminus Management dumped the largest investment of the 700 funds monitored by Insider Monkey, comprising an estimated $15 million in stock. David Harding’s fund, Winton Capital Management, also said goodbye to its stock, about $10.9 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 6 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Pinnacle West Capital Corporation (NYSE:PNW) but similarly valued. These stocks are Aramark (NYSE:ARMK), DENTSPLY International Inc. (NASDAQ:XRAY), The WhiteWave Foods Co (NYSE:WWAV), and Torchmark Corporation (NYSE:TMK). All of these stocks’ market caps match PNW’s market cap.

As you can see these stocks had an average of 34.75 hedge funds with bullish positions and the average amount invested in these stocks was $1183 million. That figure was $424 million in PNW’s case. Aramark (NYSE:ARMK) is the most popular stock in this table. On the other hand Torchmark Corporation (NYSE:TMK) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks Pinnacle West Capital Corporation (NYSE:PNW) is even less popular than TMK. 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.