Hedge Funds Have Never Been This Bullish On PPDAI Group Inc. (PPDF)

At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

PPDAI Group Inc. (NYSE:PPDF) has experienced an increase in support from the world’s most elite money managers recently. Our calculations also showed that ppdf isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are dozens of tools stock traders have at their disposal to assess their holdings. A duo of the less known tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top fund managers can beat the S&P 500 by a healthy amount (see the details here).

Millennium Management, Catapult Capital Management

We’re going to take a peek at the key hedge fund action surrounding PPDAI Group Inc. (NYSE:PPDF).

What have hedge funds been doing with PPDAI Group Inc. (NYSE:PPDF)?

Heading into the first quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards PPDF over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with PPDF Positions

The largest stake in PPDAI Group Inc. (NYSE:PPDF) was held by Arrowstreet Capital, which reported holding $3.7 million worth of stock at the end of December. It was followed by Marshall Wace LLP with a $0.5 million position. Other investors bullish on the company included Millennium Management, Sensato Capital Management, and Weld Capital Management.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the largest position in PPDAI Group Inc. (NYSE:PPDF). Marshall Wace LLP had $0.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.3 million investment in the stock during the quarter. The other funds with brand new PPDF positions are Ernest Chow and Jonathan Howe’s Sensato Capital Management and Minhua Zhang’s Weld Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as PPDAI Group Inc. (NYSE:PPDF) but similarly valued. We will take a look at Tortoise Energy Infrastructure Corporation (NYSE:TYG), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), BJ’s Restaurants, Inc. (NASDAQ:BJRI), and Wageworks Inc (NYSE:WAGE). This group of stocks’ market values are similar to PPDF’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TYG 3 2890 0
AAWW 19 121011 4
BJRI 21 145000 1
WAGE 13 83887 1
Average 14 88197 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $5 million in PPDF’s case. BJ’s Restaurants, Inc. (NASDAQ:BJRI) is the most popular stock in this table. On the other hand Tortoise Energy Infrastructure Corporation (NYSE:TYG) is the least popular one with only 3 bullish hedge fund positions. PPDAI Group Inc. (NYSE:PPDF) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on PPDF as the stock returned 57.8% and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.