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Is Smart Money Right to be Bullish On Pacific Ethanol Inc (PEIX)?

As one would reasonably expect, some big names were breaking ground themselves. Millennium Management established the largest position in Pacific Ethanol Inc (NASDAQ:PEIX), having $1.8 million invested in the company at the end of the quarter. Highbridge Capital Management also initiated a $0.9 million position during the quarter. The other funds with new positions in the stock are PDT Partners, Neil Chriss’ Hutchin Hill Capital, and Citadel Investment Group.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Pacific Ethanol Inc (NASDAQ:PEIX) but similarly valued. We will take a look at Stein Mart, Inc. (NASDAQ:SMRT), Glu Mobile Inc. (NASDAQ:GLUU), Consolidated-Tomoka Land Co. (NYSEAMEX:CTO), and Heritage-Crystal Clean, Inc. (NASDAQ:HCCI). This group of stocks’ market valuations resemble PEIX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SMRT 10 36258 0
GLUU 9 31180 0
CTO 8 121400 -1
HCCI 6 50196 2

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $76 million in PEIX’s case. Stein Mart, Inc. (NASDAQ:SMRT) is the most popular stock in this table. On the other hand Heritage-Crystal Clean, Inc. (NASDAQ:HCCI) is the least popular one with only 6 bullish hedge fund positions. Pacific Ethanol Inc (NASDAQ:PEIX) is tied as the most popular stock in this group. This is a positive signal, as we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PEIX might be a good candidate to consider taking a long position in.

Disclosure: None

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