The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought People’s United Financial, Inc. (NASDAQ:PBCT) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
People’s United Financial, Inc. (NASDAQ:PBCT) has seen an increase in support from the world’s most elite money managers in recent months. People’s United Financial, Inc. (NASDAQ:PBCT) was in 24 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 25. Our calculations also showed that PBCT isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
To most stock holders, hedge funds are seen as worthless, outdated financial vehicles of the past. While there are over 8000 funds trading today, Our experts choose to focus on the top tier of this group, approximately 850 funds. These hedge fund managers handle most of the smart money’s total asset base, and by monitoring their finest equity investments, Insider Monkey has figured out many investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now we’re going to review the recent hedge fund action regarding People’s United Financial, Inc. (NASDAQ:PBCT).
What does smart money think about People’s United Financial, Inc. (NASDAQ:PBCT)?
At Q2’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. By comparison, 18 hedge funds held shares or bullish call options in PBCT a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, AQR Capital Management held the most valuable stake in People’s United Financial, Inc. (NASDAQ:PBCT), which was worth $41.1 million at the end of the third quarter. On the second spot was Millennium Management which amassed $13.5 million worth of shares. Citadel Investment Group, Hourglass Capital, and Paloma Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hourglass Capital allocated the biggest weight to People’s United Financial, Inc. (NASDAQ:PBCT), around 1.45% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to PBCT.
Now, some big names have been driving this bullishness. Paloma Partners, managed by Donald Sussman, assembled the largest position in People’s United Financial, Inc. (NASDAQ:PBCT). Paloma Partners had $3.7 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $1.9 million position during the quarter. The other funds with brand new PBCT positions are Gregg Moskowitz’s Interval Partners, Paul Tudor Jones’s Tudor Investment Corp, and Benjamin A. Smith’s Laurion Capital Management.
Let’s also examine hedge fund activity in other stocks similar to People’s United Financial, Inc. (NASDAQ:PBCT). We will take a look at First Industrial Realty Trust, Inc. (NYSE:FR), Novavax, Inc. (NASDAQ:NVAX), Oshkosh Corporation (NYSE:OSK), Sasol Limited (NYSE:SSL), Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), The Wendy’s Company (NASDAQ:WEN), and Marathon Oil Corporation (NYSE:MRO). This group of stocks’ market values resemble PBCT’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 21.7 hedge funds with bullish positions and the average amount invested in these stocks was $395 million. That figure was $89 million in PBCT’s case. The Wendy’s Company (NASDAQ:WEN) is the most popular stock in this table. On the other hand Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is the least popular one with only 9 bullish hedge fund positions. People’s United Financial, Inc. (NASDAQ:PBCT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PBCT is 68.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately PBCT wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on PBCT were disappointed as the stock returned -12.8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.