Are Hedge Funds Right to be Bullish on Precision Castparts Corp. (PCP)?

As industrywide interest jumped, some big names were breaking ground themselves. Pentwater Capital Management established the largest position in Precision Castparts Corp. (NYSE:PCP). Pentwater Capital Management had $763.8 million invested in the company at the end of the quarter. John Paulson’s Paulson & Co also made a $229.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Robert Emil Zoellner’s Alpine Associates, John Orrico’s Water Island Capital, and Carl Tiedemann and Michael Tiedemann’s TIG Advisors.

Let’s check out hedge fund activity in other stocks similar to Precision Castparts Corp. (NYSE:PCP). These stocks are Tesla Motors Inc (NASDAQ:TSLA), CME Group Inc (NASDAQ:CME), Thomson Reuters Corporation (USA) (NYSE:TRI), and Broadcom Corporation (NASDAQ:BRCM). This group of stocks’ market valuations match PCP’s market valuation.

As you can see these stocks had an average of 36.75 hedge funds with bullish positions and the average amount invested in these stocks was $2.24 billion. That figure was $6.45 billion in PCP’s case. Broadcom Corporation (NASDAQ:BRCM) is the most popular stock in this table. On the other hand Thomson Reuters Corporation (USA) (NYSE:TRI) is the least popular one with only 12 bullish hedge fund positions. Precision Castparts Corp. (NYSE:PCP) is not quite the most popular stock in this group (being tied with BRCM and having slightly less capital invested in it than BRCM does), but hedge fund interest is still well above average. This is a positive signal and both BRCM and PCP are good candidate to consider taking up a long position in.