The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of PAR Technology Corporation (NYSE:PAR).
Is PAR Technology Corporation (NYSE:PAR) the right pick for your portfolio? Hedge funds are becoming less hopeful. The number of long hedge fund positions decreased by 4 lately. Our calculations also showed that PAR 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). PAR was in 8 hedge funds’ portfolios at the end of March. There were 12 hedge funds in our database with PAR positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to analyze the new hedge fund action regarding PAR Technology Corporation (NYSE:PAR).
How are hedge funds trading PAR Technology Corporation (NYSE:PAR)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in PAR a year ago. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in PAR Technology Corporation (NYSE:PAR) was held by Nine Ten Partners, which reported holding $16.7 million worth of stock at the end of September. It was followed by Royce & Associates with a $12.1 million position. Other investors bullish on the company included Greenhaven Road Investment Management, Atreides Management, and Nantahala Capital Management. In terms of the portfolio weights assigned to each position ADW Capital allocated the biggest weight to PAR Technology Corporation (NYSE:PAR), around 44.72% of its 13F portfolio. Greenhaven Road Investment Management is also relatively very bullish on the stock, setting aside 13.21 percent of its 13F equity portfolio to PAR.
Because PAR Technology Corporation (NYSE:PAR) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of money managers who sold off their positions entirely by the end of the first quarter. Intriguingly, Chris Yetter’s Dumont Global dropped the largest investment of the “upper crust” of funds watched by Insider Monkey, valued at close to $15.4 million in stock, and D. E. Shaw’s D E Shaw was right behind this move, as the fund sold off about $1.7 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 4 funds by the end of the first quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as PAR Technology Corporation (NYSE:PAR) but similarly valued. We will take a look at RGC Resources, Inc. (NASDAQ:RGCO), Golar LNG Partners LP (NASDAQ:GMLP), Sunlands Technology Group (NYSE:STG), and Altus Midstream Company (NASDAQ:ALTM). This group of stocks’ market caps are closest to PAR’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 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $66 million in PAR’s case. Golar LNG Partners LP (NASDAQ:GMLP) is the most popular stock in this table. On the other hand RGC Resources, Inc. (NASDAQ:RGCO) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks PAR Technology Corporation (NYSE:PAR) is more popular among hedge funds. 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 returned 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on PAR as the stock returned 120.3% so far in Q2 (through June 17th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.