Party City Holdco Inc (PRTY): Does It Stack Up Against Its Peers?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Party City Holdco Inc (NYSE:PRTY).

Party City Holdco Inc (NYSE:PRTY) investors should be aware of an increase in hedge fund interest recently. PRTY was in 9 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with PRTY positions at the end of June. At the end of this article we will also compare PRTY to other stocks including Synaptics, Incorporated (NASDAQ:SYNA), LTC Properties Inc (NYSE:LTC), and HubSpot Inc (NYSE:HUBS) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Hedge fund activity in Party City Holdco Inc (NYSE:PRTY)

At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a jump of 29% from the second quarter of 2016, which followed a steep fall in Q2, as hedge fund ownership of the stock has been volatile. By comparison, 8 hedge funds held shares or bullish call options in PRTY heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Rob Citrone’s Discovery Capital Management has the biggest position in Party City Holdco Inc (NYSE:PRTY), worth close to $22.3 million. Coming in second is Welch Capital Partners, led by Leighton Welch, holding an $8.4 million position; 2.7% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism consist of D E Shaw, one of the biggest hedge funds in the world, Mark Coe’s Coe Capital Management, and Michael Platt and William Reeves’ BlueCrest Capital Mgmt.. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.

Now, key money managers have been driving this bullishness. Welch Capital Partners established the largest position in Party City Holdco Inc (NYSE:PRTY). Mark Coe’s Coe Capital Management also initiated a $1.5 million position during the quarter. The following funds were also among the new PRTY investors: Michael Platt and William Reeves’ BlueCrest Capital Mgmt, Jim Simons’ Renaissance Technologies, and Neil Chriss’ Hutchin Hill Capital.

Let’s now review hedge fund activity in other stocks similar to Party City Holdco Inc (NYSE:PRTY). We will take a look at Synaptics, Incorporated (NASDAQ:SYNA), LTC Properties Inc (NYSE:LTC), HubSpot Inc (NYSE:HUBS), and Tetra Tech, Inc. (NASDAQ:TTEK). All of these stocks’ market caps match PRTY’s market cap.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $36 million in PRTY’s case. HubSpot Inc (NYSE:HUBS) is the most popular stock in this table. On the other hand LTC Properties Inc (NYSE:LTC) is the least popular one with only 5 bullish hedge fund positions. Party City Holdco Inc (NYSE:PRTY) 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 HUBS might be a better candidate to consider taking a long position in.

Disclosure: None