We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Pinnacle Entertainment Inc (NYSE:PNK), and what that likely means for the prospects of the company and its stock.
Hedge fund interest in Pinnacle Entertainment Inc (NYSE:PNK) shares was flat during the third quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as H&E Equipment Services, Inc. (NASDAQ:HEES), Inovio Pharmaceuticals Inc (NYSEAMEX:INO), and EarthLink, Inc. (NASDAQ:ELNK) to gather more data points.
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What have hedge funds been doing with Pinnacle Entertainment Inc (NYSE:PNK)?
Heading into the fourth quarter of 2016, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the second quarter of 2016, which followed a steep decline during the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Driehaus Capital, managed by Richard Driehaus, holds the largest position in Pinnacle Entertainment Inc (NYSE:PNK). Driehaus Capital has a $70.4 million position in the stock, comprising 2.4% of its 13F portfolio. Sitting at the No. 2 spot is HG Vora Capital Management, led by Parag Vora, holding a $66 million position; the fund has 8.5% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Jeffrey Smith’s Starboard Value LP, Don Morgan’s Brigade Capital and Carson Yost’s Yost Capital Management.