Powell Industries, Inc. (POWL): Are Hedge Funds Right About This Stock?

As one would reasonably expect, key hedge funds have been driving this bullishness. Beddow Capital Management assembled the largest position in Powell Industries, Inc. (NASDAQ:POWL). One of the biggest hedge funds in the world, Millennium Management, also initiated a $1.9 million position during the quarter. The other funds with brand new POWL positions are Neil Chriss’s Hutchin Hill Capital, Joel Greenblatt’s Gotham Asset Management, and Robert B. Gillam’s McKinley Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Powell Industries, Inc. (NASDAQ:POWL) but similarly valued. These stocks are Iconix Brand Group Inc (NASDAQ:ICON), Ocwen Financial Corporation (NYSE:OCN), Boulevard Acquisition Corp II (NASDAQ:BLVD), and Catchmark Timber Trust Inc (NYSE:CTT). This group of stocks’ market caps match POWL’s market cap.

As you can see these stocks had an average of 13 funds with bullish positions and the average amount invested in these stocks was $80 million, versus $50 million in POWL’s case. Ocwen Financial Corporation (NYSE:OCN) is the most popular stock in this table. On the other hand Iconix Brand Group Inc (NASDAQ:ICON) is the least popular one with only 11 funds having reported long positions. Powell Industries, Inc. (NASDAQ:POWL) 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 Ocwen Financial Corporation (NYSE:OCN) might be a better candidate to consider taking a long position in.

Disclosure: none