Hedge Fund Interest Growing Stale In Panera Bread Co (PNRA)

With the third quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Panera Bread Co (NASDAQ:PNRA), and we’ll study the latest sentiment for this stock below.

Panera Bread Co (NASDAQ:PNRA)

Panera Bread Co (NASDAQ:PNRA) shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months, with hedge fund ownership dropping by 15% among those that we track. At the end of this article we will also compare PNRA to other stocks including Black Knight Financial Services Inc (NYSE:BKFS), LendingClub Corp (NYSE:LC), and Albemarle Corporation (NYSE:ALB) to get a better sense of its popularity.

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In the eyes of most shareholders, hedge funds are assumed to be underperforming, old financial vehicles of yesteryear. While there are greater than 8,000 funds in operation at present, experts at hedge fund tracking site Insider Monkey hone in on the upper echelon of this club, approximately 700 funds. Most estimates calculate that this group of people manage the majority of the smart money’s total capital, and by watching their best picks, Insider Monkey has come up with many investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per year for a decade in its back tests.

With all of this in mind, let’s take a look at the key action regarding Panera Bread Co (NASDAQ:PNRA).

How have hedgies been trading Panera Bread Co (NASDAQ:PNRA)?

At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by four from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly.

According to Insider Monkey’s hedge fund database, Luxor Capital Group, managed by Christian Leone, holds the biggest position in Panera Bread Co (NASDAQ:PNRA). Luxor Capital Group has a $193 million position in the stock, comprising 4.4% of its 13F portfolio. On Luxor Capital Group’s heels is James Crichton of Hitchwood Capital Management, with a $118 million position; the fund has 4.1% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions consist of Rob Citrone’s Discovery Capital Management, Israel Englander’s Millennium Management, and David Harding’s Winton Capital Management.

Seeing as Panera Bread Co (NASDAQ:PNRA) has experienced bearish sentiment from hedge fund managers, logic holds that there was a specific group of money managers that decided to sell off their full holdings by the end of the third quarter. It’s worth mentioning that Leon Cooperman’s Omega Advisors dumped the biggest investment of the 700 funds tracked by Insider Monkey, worth about $27.6 million in call options, while Bruce Kovner’s Caxton Associates LP was right behind this move, as the fund cut about $23.6 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest fell by four funds during the third quarter.

Let’s go over hedge fund activity in other stocks similar to Panera Bread Co (NASDAQ:PNRA). We will take a look at Black Knight Financial Services Inc (NYSE:BKFS), LendingClub Corp (NYSE:LC), Albemarle Corporation (NYSE:ALB), and Equity Lifestyle Properties, Inc. (NYSE:ELS). This group of stocks’ market valuations are closest to PNRA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BKFS 15 41563 -4
LC 15 311109 -11
ALB 29 662313 -7
ELS 13 380919 1

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $349 million, which Panera nearly doubled at $689 million. Albemarle Corporation (NYSE:ALB) is the most popular stock in this table. On the other hand Equity Lifestyle Properties, Inc. (NYSE:ELS) is the least popular one with only 13 bullish hedge fund positions. Panera Bread Co (NASDAQ:PNRA) 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 ALB might be a better candidate to consider a long position in.