Seeing as Paychex, Inc. (NASDAQ:PAYX) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedge funds that elected to cut their positions entirely in the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the biggest position of the 700 funds followed by Insider Monkey, totaling close to $11.7 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dumped its stock, about $8.4 million worth of PAYX shares. These transactions are interesting, as total hedge fund interest fell by 9 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Paychex, Inc. (NASDAQ:PAYX). These stocks are Potash Corp./Saskatchewan (USA) (NYSE:POT), Vornado Realty Trust (NYSE:VNO), Intuitive Surgical, Inc. (NASDAQ:ISRG), and Macy’s, Inc. (NYSE:M). This group of stocks’ market valuations are closest to PAYX’s market valuation.
|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 39 hedge funds with bullish positions and the average amount invested in these stocks was $977 million. That figure was just $485 million in PAYX’s case. Macy’s, Inc. (NYSE:M) is the most popular stock in this table. On the other hand Vornado Realty Trust (NYSE:VNO) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Paychex, Inc. (NASDAQ:PAYX) is even less popular than VNO. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.