The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtPure Storage, Inc. (NYSE:PSTG) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Pure Storage, Inc. (NYSE:PSTG) has seen a decrease in activity from the world’s largest hedge funds recently. Our calculations also showed that PSTG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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Hedge fund activity in Pure Storage, Inc. (NYSE:PSTG)
At Q1’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the fourth quarter of 2019. On the other hand, there were a total of 21 hedge funds with a bullish position in PSTG a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Pure Storage, Inc. (NYSE:PSTG) was held by Eminence Capital, which reported holding $174.4 million worth of stock at the end of September. It was followed by D E Shaw with a $35.6 million position. Other investors bullish on the company included Renaissance Technologies, Citadel Investment Group, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Cannell Capital allocated the biggest weight to Pure Storage, Inc. (NYSE:PSTG), around 2.46% of its 13F portfolio. Eminence Capital is also relatively very bullish on the stock, designating 1.91 percent of its 13F equity portfolio to PSTG.
Due to the fact that Pure Storage, Inc. (NYSE:PSTG) has experienced falling interest from hedge fund managers, logic holds that there were a few hedge funds who sold off their entire stakes by the end of the first quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the biggest position of the 750 funds watched by Insider Monkey, totaling about $5.6 million in stock, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management was right behind this move, as the fund dumped about $5.5 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 4 funds by the end of the first quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Pure Storage, Inc. (NYSE:PSTG) but similarly valued. These stocks are FirstService Corporation (TSE:FSV), Silgan Holdings Inc. (NASDAQ:SLGN), The Middleby Corporation (NASDAQ:MIDD), and Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA). This group of stocks’ market values resemble PSTG’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $321 million in PSTG’s case. Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) is the most popular stock in this table. On the other hand FirstService Corporation (TSE:FSV) is the least popular one with only 12 bullish hedge fund positions. Pure Storage, Inc. (NYSE:PSTG) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on PSTG as the stock returned 40.9% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.