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Should You Avoid Plantronics, Inc. (PLT)?

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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 Plantronics, Inc. (NYSE:PLT) , and what that likely means for the prospects of the company and its stock.

Plantronics, Inc. (NYSE:PLT) was in 12 hedge funds’ portfolios at the end of September. PLT investors should be aware of a decrease in support from the world’s most successful money managers of late. There were 14 hedge funds in our database with PLT positions at the end of the previous quarter. At the end of this article we will also compare PLT to other stocks including DigitalGlobe Inc (NYSE:DGI), Trex Company, Inc. (NYSE:TREX), and Viavi Solutions Inc (NASDAQ:VIAV) to get a better sense of its popularity.

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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.

Vizual Vortex Studio/Shutterstock.com

Vizual Vortex Studio/Shutterstock.com

Keeping this in mind, let’s check out the recent action encompassing Plantronics, Inc. (NYSE:PLT).

How are hedge funds trading Plantronics, Inc. (NYSE:PLT)?

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 14% from the second quarter of 2016. By comparison, 16 hedge funds held shares or bullish call options in PLT heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HedgeFundSentimentChart (1)

According to Insider Monkey’s hedge fund database, AQR Capital Management, led by Cliff Asness, holds the biggest position in Plantronics, Inc. (NYSE:PLT). According to regulatory filings, the fund has a $20.3 million position in the stock, comprising less than 0.1% of its 13F portfolio. Coming in second is Gotham Asset Management, led by Joel Greenblatt, holding a $9.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, D E Shaw, one of the biggest hedge funds in the world, and Jim Simons’s Renaissance Technologies. 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-microcap stocks.

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