With the U.S. stock market rallying following news of increased consumer confidence, the two stocks have also been boosted by a positive reaction to a new wave of analyst ratings. Panera Bread Co (NASDAQ:PNRA) was awarded an ‘Outperform’ rating from analysts at Telsey Advisory Group, according to a new research report issued today. They also believe the stock could go as high as $225 per share. Sterne Agee CRT has also recently initiated coverage on Apple Inc. (NASDAQ:AAPL), with analysts believing the stock to be a ‘Buy’ and having set a price target of $150 per share. During the second quarter, hedge funds have become more attracted to Panera Bread, while Apple has lost some support, although it remained one of the most popular companies among the funds we track.
Panera Bread Co (NASDAQ:PNRA)‘s stock managed to stage a rally recently, following the August market sell-off, and is up 8.57% so far this month. Barclays analysts are also bullish on this stock, having reiterated their Overweight rating at the end of July and a price target of $215, while Maxim Group believes the stock is a ‘Hold’. During the second quarter, the number of hedge funds holding a stake in Panera increased to 27, from 25 at the end of March, while the value of their aggregate positions surged by 52% to $562 million. Their investment also accounts for 12% of the company’s total outstanding stock.
An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock-picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised of large- and mega-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds lagged the market by an average of 7.0 basis points per month in our backtests, whereas the 15 most popular small-cap ideas among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 60 percentage points and returning over 118%, while hedge funds have collectively underperformed the market (read more details here).
Luxor Capital Group holds the largest stake on Panera Bread Co (NASDAQ:PNRA) among the hedge funds that we follow. Christian Leone, the fund’s manager, increased his stake in the company by 184% to 997,838 shares during the second quarter, while Israel Englander boosted his stake by 260% to amass 322,824 shares according to Millennium Management’s latest 13F filing. James Crichton, the manager of Hitchwood Capital Management, has decided to join the party as well and has initiated a stake in Panera Bread, stockpiling 350,000 shares by the end of the quarter.