Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Primerica, Inc. (NYSE:PRI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Primerica, Inc. (NYSE:PRI) was in 20 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 35. PRI has experienced a decrease in hedge fund interest of late. There were 31 hedge funds in our database with PRI positions at the end of the fourth quarter. Our calculations also showed that PRI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Keeping this in mind we’re going to take a gander at the key hedge fund action encompassing Primerica, Inc. (NYSE:PRI).
Do Hedge Funds Think PRI Is A Good Stock To Buy Now?
At first quarter’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -35% from the fourth quarter of 2020. By comparison, 23 hedge funds held shares or bullish call options in PRI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Brave Warrior Capital held the most valuable stake in Primerica, Inc. (NYSE:PRI), which was worth $279.2 million at the end of the fourth quarter. On the second spot was Cantillon Capital Management which amassed $149.1 million worth of shares. Arrowstreet Capital, Prospector Partners, and Brant Point Investment Management 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 Brave Warrior Capital allocated the biggest weight to Primerica, Inc. (NYSE:PRI), around 9.12% of its 13F portfolio. Running Oak Capital is also relatively very bullish on the stock, earmarking 1.79 percent of its 13F equity portfolio to PRI.
Seeing as Primerica, Inc. (NYSE:PRI) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there were a few hedgies that decided to sell off their positions entirely last quarter. Interestingly, Sander Gerber’s Hudson Bay Capital Management dropped the largest stake of all the hedgies monitored by Insider Monkey, totaling an estimated $7.4 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $4.4 million worth. These moves are interesting, as total hedge fund interest was cut by 11 funds last quarter.
Let’s also examine hedge fund activity in other stocks similar to Primerica, Inc. (NYSE:PRI). These stocks are HollyFrontier Corporation (NYSE:HFC), Foot Locker, Inc. (NYSE:FL), Kodiak Sciences Inc (NASDAQ:KOD), Pilgrim’s Pride Corporation (NASDAQ:PPC), Corelogic Inc (NYSE:CLGX), Regal Beloit Corporation (NYSE:RBC), and Shoals Technologies Group, Inc. (NASDAQ:SHLS). This group of stocks’ market values are similar to PRI’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 26 hedge funds with bullish positions and the average amount invested in these stocks was $684 million. That figure was $499 million in PRI’s case. Corelogic Inc (NYSE:CLGX) is the most popular stock in this table. On the other hand Pilgrim’s Pride Corporation (NASDAQ:PPC) is the least popular one with only 16 bullish hedge fund positions. Primerica, Inc. (NYSE:PRI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PRI is 17.2. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately PRI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PRI investors were disappointed as the stock returned -1.4% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Primerica Inc. (NYSE:PRI)
Follow Primerica Inc. (NYSE:PRI)
- 10 Biggest Phone Companies In The World
- 11 Best Lithium Stocks To Buy Now
- 15 Countries With The Highest Corporate Tax Rates
Disclosure: None. This article was originally published at Insider Monkey.