Hedge Funds Never Been Less Bullish On Potbelly Corp (PBPB)

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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Potbelly Corp (NASDAQ:PBPB)?

Is Potbelly Corp (NASDAQ:PBPB) the right investment to pursue these days? Money managers are becoming less hopeful. The number of long hedge fund bets dropped by 4 lately. Our calculations also showed that PBPB 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).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Today there are a multitude of gauges stock market investors have at their disposal to assess stocks. A duo of the most under-the-radar gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat their index-focused peers by a very impressive margin (see the details here).


Philippe Laffont of Coatue Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s analyze the key hedge fund action encompassing Potbelly Corp (NASDAQ:PBPB).

What does smart money think about Potbelly Corp (NASDAQ:PBPB)?

Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -36% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards PBPB over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

Is PBPB A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies,  holds the number one position in Potbelly Corp (NASDAQ:PBPB). Renaissance Technologies has a $5.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Ancora Advisors, led by Frederick DiSanto, holding a $3.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Ancora Advisors allocated the biggest weight to Potbelly Corp (NASDAQ:PBPB), around 0.18% of its 13F portfolio. Engine Capital is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to PBPB.

Because Potbelly Corp (NASDAQ:PBPB) has witnessed a decline in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of fund managers that elected to cut their full holdings in the first quarter. Interestingly, Chris Yetter’s Dumont Global dumped the largest stake of all the hedgies monitored by Insider Monkey, valued at about $0.9 million in stock. Philippe Laffont’s fund, Coatue Management, also cut its stock, about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 4 funds in the first quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Potbelly Corp (NASDAQ:PBPB) but similarly valued. We will take a look at Arbutus Biopharma Corp (NASDAQ:ABUS), Citizens Community Bancorp Inc. (NASDAQ:CZWI), Century Casinos, Inc. (NASDAQ:CNTY), and Greenlane Holdings, Inc. (NASDAQ:GNLN). This group of stocks’ market values match PBPB’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ABUS 7 5169 -2
CZWI 6 10048 -1
CNTY 8 13239 -4
GNLN 6 2321 2
Average 6.75 7694 -1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $11 million in PBPB’s case. Century Casinos, Inc. (NASDAQ:CNTY) is the most popular stock in this table. On the other hand Citizens Community Bancorp Inc. (NASDAQ:CZWI) is the least popular one with only 6 bullish hedge fund positions. Potbelly Corp (NASDAQ:PBPB) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately PBPB wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on PBPB were disappointed as the stock returned -10.7% during the same time period 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.