Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC).
Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) has experienced a decrease in hedge fund sentiment of late. PAC was in 5 hedge funds’ portfolios at the end of the first quarter of 2020. There were 7 hedge funds in our database with PAC holdings at the end of the previous quarter. Our calculations also showed that PAC 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the recent hedge fund action surrounding Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC).
Hedge fund activity in Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC)
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PAC over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the number one position in Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC), worth close to $60.7 million, amounting to 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $4.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that are bullish contain Cliff Asness’s AQR Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and Louis Navellier’s Navellier & Associates. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC), around 0.06% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to PAC.
Judging by the fact that Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) has experienced a decline in interest from the smart money, it’s easy to see that there is a sect of money managers who were dropping their entire stakes in the first quarter. At the top of the heap, Israel Englander’s Millennium Management dumped the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising about $3.9 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also said goodbye to its stock, about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 2 funds in the first quarter.
Let’s also examine hedge fund activity in other stocks similar to Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC). We will take a look at PNM Resources, Inc. (NYSE:PNM), TechnipFMC plc (NYSE:FTI), Ashland Global Holdings Inc.. (NYSE:ASH), and NorthWestern Corporation (NYSE:NWE). All of these stocks’ market caps are similar to PAC’s market cap.
|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 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $398 million. That figure was $66 million in PAC’s case. Ashland Global Holdings Inc.. (NYSE:ASH) is the most popular stock in this table. On the other hand NorthWestern Corporation (NYSE:NWE) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) is even less popular than NWE. Hedge funds clearly dropped the ball on PAC as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on PAC as the stock returned 23.1% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.