PNC Financial Services (NYSE:PNC) has experienced a decrease in activity from the world's largest hedge funds of late.
According to most traders, hedge funds are seen as unimportant, outdated investment vehicles of years past. While there are over 8000 funds trading at the moment, we at Insider Monkey look at the aristocrats of this club, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry's total asset base, and by monitoring their highest performing picks, we have brought to light a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, optimistic insider trading activity is another way to break down the marketplace. There are a variety of reasons for a corporate insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).
With all of this in mind, let's take a peek at the key action surrounding PNC Financial Services (NYSE:PNC).
At Q1's end, a total of 31 of the hedge funds we track were long in this stock, a change of -26% from the first quarter. With hedgies' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, Ken Griffin's Citadel Investment Group had the biggest position in PNC Financial Services (NYSE:PNC), worth close to $245.9 million, accounting for 0.4% of its total 13F portfolio. Coming in second is Pzena Investment Management, managed by Richard S. Pzena, which held a $230.5 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other peers that are bullish include Ric Dillon's Diamond Hill Capital, Phill Gross and Robert Atchinson's Adage Capital Management and Mario Gabelli's GAMCO Investors.
Judging by the fact that PNC Financial Services (NYSE:PNC) has experienced bearish sentiment from hedge fund managers, it's easy to see that there lies a certain "tier" of money managers who were dropping their full holdings in Q1. It's worth mentioning that Jim Simons's Renaissance Technologies dumped the biggest position of the "upper crust" of funds we monitor, valued at an estimated $27.5 million in stock.. George Soros's fund, Soros Fund Management, also sold off its stock, about $21.6 million worth. These moves are interesting, as total hedge fund interest dropped by 11 funds in Q1.
Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past 180 days. Over the last 180-day time period, PNC Financial Services (NYSE:PNC) has experienced zero unique insiders purchasing, and 12 insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to PNC Financial Services (NYSE:PNC). These stocks are SunTrust Banks, Inc. (NYSE:STI), Toronto-Dominion Bank (USA) (NYSE:TD), The Bank of Nova Scotia (USA) (NYSE:BNS), Bank of Montreal (USA) (NYSE:BMO), and Canadian Imperial Bank of Commerce (USA) (NYSE:CM). This group of stocks belong to the money center banks industry and their market caps resemble PNC's market cap.