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 Prestige Consumer Healthcare Inc. (NYSE:PBH) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is Prestige Consumer Healthcare Inc. (NYSE:PBH) a buy here? Investors who are in the know were taking an optimistic view. The number of bullish hedge fund positions inched up by 3 lately. Prestige Consumer Healthcare Inc. (NYSE:PBH) was in 20 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PBH 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.
According to most traders, hedge funds are perceived as underperforming, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open today, We choose to focus on the masters of this group, about 850 funds. It is estimated that this group of investors direct the majority of the hedge fund industry’s total asset base, and by keeping an eye on their matchless picks, Insider Monkey has spotted a few investment strategies that have historically surpassed 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 a year 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, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. 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. With all of this in mind we’re going to analyze the new hedge fund action encompassing Prestige Consumer Healthcare Inc. (NYSE:PBH).
What does smart money think about Prestige Consumer Healthcare Inc. (NYSE:PBH)?
At second quarter’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in PBH a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the most valuable position in Prestige Consumer Healthcare Inc. (NYSE:PBH), worth close to $29.8 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $22.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions contain Noam Gottesman’s GLG Partners, Renaissance Technologies and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Quantinno Capital allocated the biggest weight to Prestige Consumer Healthcare Inc. (NYSE:PBH), around 0.49% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to PBH.
Consequently, key money managers have been driving this bullishness. PDT Partners, managed by Peter Muller, assembled the largest position in Prestige Consumer Healthcare Inc. (NYSE:PBH). PDT Partners had $2 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $1.7 million investment in the stock during the quarter. The other funds with brand new PBH positions are Jinghua Yan’s TwinBeech Capital, David Harding’s Winton Capital Management, and Parvinder Thiara’s Athanor Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Prestige Consumer Healthcare Inc. (NYSE:PBH) but similarly valued. These stocks are Central Garden & Pet Co (NASDAQ:CENT), Dicerna Pharmaceuticals Inc (NASDAQ:DRNA), EVO Payments, Inc. (NASDAQ:EVOP), Atlas Corp. (NYSE:ATCO), SciPlay Corporation (NASDAQ:SCPL), BankUnited Inc (NYSE:BKU), and Nelnet, Inc. (NYSE:NNI). This group of stocks’ market values are similar to PBH’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $247 million. That figure was $119 million in PBH’s case. Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) is the most popular stock in this table. On the other hand Atlas Corp. (NYSE:ATCO) is the least popular one with only 12 bullish hedge fund positions. Prestige Consumer Healthcare Inc. (NYSE:PBH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PBH is 38. 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 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately PBH wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on PBH were disappointed as the stock returned -3% in Q3 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.
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Disclosure: None. This article was originally published at Insider Monkey.