Nelson Obus‘ Wynnefield Capital has initiated a position in Global Power Equipment Group Inc (NYSE:GLPW) by acquiring some 2.19 million shares through its affiliated funds. The stake, which comprises 1.07 million shares that are held directly by the firm and 1.13 million shares held indirectly, amasses about 12% of the $112.30 million company’s outstanding shares. The transactions were carried out between July 17 and July 21
Wynnefield Capital was established in 1992 with the aim of concentrating on small-cap companies which have an industry specific catalyst. Although the firm has quite a few activist stakes to boast, it refrains from hostile takeovers and battles with the boards of directors of companies. Obus was in the news last year with regards to insider trading allegations, which he successfully defended in a two-week trial. Currently the firm has about $309 million in regulatory assets under its management.
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Operating in three segments, namely Product Solutions, Nuclear Services, and Energy Service, Global Power Equipment Group Inc (NYSE:GLPW) provides customer-engineered equipment, and modification and maintenance services. The industrial company’s stock fell by over 33% on May 7 when the company announced a delay in the reporting of its first quarter financial results, and an intention to restate its results for the fiscal year 2014 due to accounting errors found by the Audit Committee. In this connection, various law firms are seeking shareholders who acquired Global Power Equipment Group Inc (NYSE:GLPW)’s stock between March and April to appoint them as lead plaintiff. The complaint alleges that the company understated its cost of sales for the fiscal year 2014, that it lacked internal controls over its financial reporting, and hence mislead investors.
So far this year Global Power Equipment Group Inc (NYSE:GLPW)’s stock has depreciated by more than 53%, while the industry of diversified industrials has posted gains of 5.7% during the same period. The current cheap valuation of the stock in light of the prevailing uncertain circumstances is perhaps one of the main reasons which has drawn Wynnefield to it.
Global Power Equipment Group Inc (NYSE:GLPW) faced a slight loss of interest from professional money managers in the first quarter. At the end of the first quarter a total of nine hedge funds among those that we track, had long positions in the stock, with an aggregate investment of about $44.77 million, compared to ten firms with $46.04 million at the end of the previous quarter. The stock depreciated by about 4% during this period. Royce & Associates, led by Chuck Royce, and Peter Schliemann‘s Rutabaga Capital Management are the two largest stockholders of Global Power Equipment Group Inc (NYSE:GLPW) among the aforementioned hedge funds. Their respective holdings amount to 1.98 million shares valued at $26.20 million and about 963,800 shares valued at $12.72 million.
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