How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding PriceSmart, Inc. (NASDAQ:PSMT).
PriceSmart, Inc. (NASDAQ:PSMT) was in 12 hedge funds’ portfolios at the end of September. PriceSmart, Inc. shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 9 hedge funds in our database with PriceSmart, Inc. positions at the end of the previous quarter. 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 The Timken Company (NYSE:TKR), Domtar Corp (USA) (NYSE:UFS), and Covanta Holding Corporation (NYSE:CVA) to gather more data points.
Today there are many metrics investors use to assess their holdings. A couple of the most useful metrics are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outclass their index-focused peers by a significant amount (see the details here).
With all of this in mind, we’re going to take a look at the key action regarding PriceSmart, Inc. (NASDAQ:PSMT).
How have hedgies been trading PriceSmart, Inc. (NASDAQ:PSMT)?
Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a 33% jump from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or had already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Gotham Asset Management, managed by Joel Greenblatt, holds the most valuable position in PriceSmart, Inc. (NASDAQ:PSMT). Gotham Asset Management has a $9.7 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Renaissance Technologies, holding a $9.7 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism contain Steve Cohen’s Point72 Asset Management, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.