Earlier this year, many hedge funds were holding a larger percentage of their assets in cash than at any other time in recent memory, as fears that the market was due for a correction abounded. This led to many small-cap stocks being hit hard, as hedge funds, which tend to be some of their staunchest backers, liquidated their holdings. Now however, hedge funds appear to be growing more confident and putting their money back into equities, which has led to small-cap stocks taking off, with the Russell 2000 ETF (IWM) having outperformed the S&P 500 ETF (SPY) by more than 10 percentage points since the end of June. In this article, we’ll see how this large shift in hedge fund activity impacted Panera Bread Co (NASDAQ:PNRA).
Is Panera Bread Co (NASDAQ:PNRA) a buy right now? The best stock pickers are in a bullish mood. The number of long hedge fund bets increased by 10 lately. PNRA was in 33 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with PNRA positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as RenaissanceRe Holdings Ltd. (NYSE:RNR), Old Republic International Corporation (NYSE:ORI), and Voya Financial Inc (NYSE:VOYA) to gather more data points.
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How have hedgies been trading Panera Bread Co (NASDAQ:PNRA)?
At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 43% leap from the second quarter of 2016, after several volatile quarters of hedge fund trading in the stock. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Principal Global Investors’ Columbus Circle Investors has the biggest position in Panera Bread Co (NASDAQ:PNRA), worth close to $83.3 million. Sitting at the No. 2 spot is Conatus Capital Management, led by David Stemerman, holding a $57.5 million position. Remaining members of the smart money with similar optimism encompass Israel Englander’s Millennium Management, Jim Simons’ Renaissance Technologies, and James Crichton’s Hitchwood Capital Management.
Now, key hedge funds were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, created the most outsized call position in Panera Bread Co (NASDAQ:PNRA). Citadel Investment Group had $10.2 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also initiated a $9.7 million position during the quarter. The following funds were also among the new PNRA investors: Leon Shaulov’s Maplelane Capital, Sander Gerber’s Hudson Bay Capital Management, and Bruce Kovner’s Caxton Associates LP.
Let’s go over hedge fund activity in other stocks similar to Panera Bread Co (NASDAQ:PNRA). These stocks are RenaissanceRe Holdings Ltd. (NYSE:RNR), Old Republic International Corporation (NYSE:ORI), Voya Financial Inc (NYSE:VOYA), and Tegna Inc (NYSE:TGNA). This group of stocks’ market values resemble PNRA’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $547 million. That figure was $370 million in PNRA’s case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table. On the other hand RenaissanceRe Holdings Ltd. (NYSE:RNR) is the least popular one with only 17 bullish hedge fund positions. Panera Bread Co (NASDAQ:PNRA) is not the most popular stock in this group but hedge fund interest is still above average and growing fast. This is a positive signal, though we’re more impressed by the hedge fund ownership and money invested in VOYA, which might be a better candidate to consider a long position in.