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 Par Pacific Holdings, Inc. (NYSE:PARR).
Par Pacific Holdings, Inc. (NYSE:PARR) investors should pay attention to an increase in hedge fund sentiment in recent months. Par Pacific Holdings, Inc. (NYSE:PARR) was in 25 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PARR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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. With all of this in mind we’re going to go over the new hedge fund action surrounding Par Pacific Holdings, Inc. (NYSE:PARR).
Do Hedge Funds Think PARR Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 79% from the fourth quarter of 2020. By comparison, 18 hedge funds held shares or bullish call options in PARR a year ago. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Rubric Capital Management, managed by David Rosen, holds the biggest position in Par Pacific Holdings, Inc. (NYSE:PARR). Rubric Capital Management has a $46.6 million position in the stock, comprising 2.7% of its 13F portfolio. The second largest stake is held by Jared Nussbaum of Nut Tree Capital, with a $41.1 million position; the fund has 8.6% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish consist of Phill Gross and Robert Atchinson’s Adage Capital Management, Renaissance Technologies and Daniel Beltzman and Gergory Smith’s Birch Run Capital. In terms of the portfolio weights assigned to each position Nut Tree Capital allocated the biggest weight to Par Pacific Holdings, Inc. (NYSE:PARR), around 8.57% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, dishing out 4.73 percent of its 13F equity portfolio to PARR.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, initiated the largest position in Par Pacific Holdings, Inc. (NYSE:PARR). Adage Capital Management had $14.1 million invested in the company at the end of the quarter. Frank Fu’s CaaS Capital also made a $2.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Marc Majzner’s Clearline Capital, Ken Griffin’s Citadel Investment Group, and Isaac Corre’s Governors Lane.
Let’s check out hedge fund activity in other stocks similar to Par Pacific Holdings, Inc. (NYSE:PARR). These stocks are Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL), Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), TCR2 Therapeutics Inc. (NASDAQ:TCRR), The Container Store Group Inc (NYSE:TCS), OraSure Technologies, Inc. (NASDAQ:OSUR), Knoll Inc (NYSE:KNL), and PAE Incorporated (NASDAQ:PAE). All of these stocks’ market caps resemble PARR’s market cap.
|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 16.9 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $169 million in PARR’s case. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is the most popular stock in this table. On the other hand Knoll Inc (NYSE:KNL) is the least popular one with only 10 bullish hedge fund positions. Par Pacific Holdings, Inc. (NYSE:PARR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PARR is 79.5. 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. 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 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on PARR as the stock returned 18.4% since the end of Q1 (through 7/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.