Profire Energy, Inc. (PFIE): Smart Money Not Seeing Much to be Excited About

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We view hedge fund activity in the stock as being unfavorable, but in this case there was only a single hedge fund selling its entire position: LMR Partners. 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 here, because only one of the 700+ hedge funds tracked by Insider Monkey identified the stock as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Profire Energy, Inc. (NASDAQ:PFIE) but similarly valued. These stocks are LeapFrog Enterprises, Inc. (NYSE:LF), Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), SFX Entertainment Inc (NASDAQ:SFXE), and Orion Energy Systems, Inc. (NASDAQ:OESX). All of these stocks’ market caps resemble PFIE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LF 12 5276 -5
CRBP 4 6404 1
SFXE 12 4490 -4
OESX 6 8972 0

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $3 million in PFIE’s case. LeapFrog Enterprises, Inc. (NYSE:LF) is the most popular stock in this table. On the other hand Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) is the least popular one with only 4 bullish hedge fund positions. Profire Energy, Inc. (NASDAQ:PFIE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LF or SFXE might be better candidates to consider a long position in.

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