Is it smart to be bullish on Pinnacle Entertainment, Inc (NYSE:PNK)?
At the moment, there are plenty of methods market participants can use to analyze stocks. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can outperform the broader indices by a healthy margin (see just how much).
Just as crucial, positive insider trading sentiment is a second way to look at the stock market universe. Just as you'd expect, there are many reasons for an insider to sell shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).
Keeping this in mind, it's important to discuss the newest info for Pinnacle Entertainment, Inc (NYSE:PNK).
Heading into Q3, a total of 15 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With the smart money's capital changing hands, there exists a few key hedge fund managers who were increasing their holdings considerably.
Out of the hedge funds we follow, Ken Griffin's Citadel Investment Group had the most valuable position in Pinnacle Entertainment, Inc (NYSE:PNK), worth close to $52.3 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Bridger Management, managed by Roberto Mignone, which held a $37.7 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Other peers that are bullish include John Khoury's Long Pond Capital, Dmitry Balyasny's Balyasny Asset Management and Abby Flamholz and Yehuda Blinder's ADAR Investment Management.
Judging by the fact that Pinnacle Entertainment, Inc (NYSE:PNK) has faced declining interest from upper-tier hedge fund managers, it's easy to see that there lies a certain "tier" of hedge funds that slashed their positions entirely heading into Q2. At the top of the heap, Jeffrey Vinik's Vinik Asset Management said goodbye to the largest stake of the 450+ funds we track, comprising an estimated $4.8 million in stock. Ward Davis's fund, Caerus Global Investors, also cut its stock, about $2.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Bullish insider trading is most useful when the company we're looking at has seen transactions within the past 180 days. Over the last 180-day time frame, Pinnacle Entertainment, Inc (NYSE:PNK) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to Pinnacle Entertainment, Inc (NYSE:PNK). These stocks are The Marcus Corporation (NYSE:MCS), Caesars Entertainment Corp (NASDAQ:CZR), Marriott Vacations Worldwide Corp (NYSE:VAC), Boyd Gaming Corporation (NYSE:BYD), and Ameristar Casinos, Inc. (NASDAQ:ASCA). This group of stocks are the members of the resorts & casinos industry and their market caps resemble PNK's market cap.