Do Hedge Funds Love PBF Energy Inc (PBF)?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards PBF Energy Inc (NYSE:PBF).

PBF Energy Inc (NYSE:PBF) was in 23 hedge funds’ portfolios at the end of September. PBF has experienced a decrease in enthusiasm from smart money in recent months. There were 24 hedge funds in our database with PBF holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Select Income REIT (NYSE:SIR), Yelp Inc (NYSE:YELP), and Valley National Bancorp (NYSE:VLY) to gather more data points.

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.

Keeping this in mind, we’re going to analyze the recent action regarding PBF Energy Inc (NYSE:PBF).

How have hedgies been trading PBF Energy Inc (NYSE:PBF)?

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decrease of 4% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Seth Klarman’s Baupost Group has the most valuable position in PBF Energy Inc (NYSE:PBF), worth close to $356 million, amounting to 5.1% of its total 13F portfolio. On Baupost Group’s heels is Steadfast Capital Management, led by Robert Pitts, holding a $28.1 million position; 0.5% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions encompass Steve Cohen’s Point72 Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Mark Kingdon’s Kingdon Capital.

Seeing as PBF Energy Inc (NYSE:PBF) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their entire stakes last quarter. Intriguingly, Jim Simons’s Renaissance Technologies sold off the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising close to $18.6 million in stock. Wayne Cooperman’s fund, Cobalt Capital Management, also cut its stock, about $7.4 million worth of PBF shares. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 fund last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as PBF Energy Inc (NYSE:PBF) but similarly valued. These stocks are Select Income REIT (NYSE:SIR), Yelp Inc (NYSE:YELP), Valley National Bancorp (NYSE:VLY), and Meredith Corporation (NYSE:MDP). This group of stocks’ market values resemble PBF’s market value.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $384 million. That figure was $498 million in PBF’s case. Yelp Inc (NYSE:YELP) is the most popular stock in this table. On the other hand Select Income REIT (NYSE:SIR) is the least popular one with only 12 bullish hedge fund positions. PBF Energy Inc (NYSE:PBF) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard YELP might be a better candidate to consider a long position.

Disclosure: none.