Here is What Hedge Funds Think About Principal Financial Group Inc (PFG)

Is Principal Financial Group Inc (NYSE:PFG) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

In Principal Financial Group Inc (NYSE:PFG)’s case, it looks like hedge funds are taking a bearish view. The number of bullish hedge fund positions (among the funds in our database) declined by three between July and September. In this way, 15 investors held shares of PFG at the end of the third quarter. At the end of this article we will also compare PFG to other stocks including Advance Auto Parts, Inc. (NYSE:AAP), Twitter Inc (NYSE:TWTR), and Pembina Pipeline Corp (NYSE:PBA) to get a better sense of its popularity.

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Now, we’re going to check out the fresh action encompassing Principal Financial Group Inc (NYSE:PFG).

How are hedge funds trading Principal Financial Group Inc (NYSE:PFG)?

At the end of September, 15 funds tracked by Insider Monkey were bullish on PFG, down by 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PFG over the last five quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the most valuable position in Principal Financial Group Inc (NYSE:PFG), worth close to $58.3 million, corresponding to 0.2% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson’s Adage Capital Management, with a $19.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions consist of Anand Parekh’s Alyeska Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors, and David Harding’s Winton Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Judging by the fact that Principal Financial Group Inc (NYSE:PFG) has weathered bearish sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of hedge funds that slashed their positions entirely last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group cut the biggest stake of all the investors tracked by Insider Monkey, comprising close to $1.5 million in call options. Ray Dalio’s fund, Bridgewater Associates, also dumped its stock, about $1.1 million worth.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Principal Financial Group Inc (NYSE:PFG) but similarly valued. We will take a look at Advance Auto Parts, Inc. (NYSE:AAP), Twitter Inc (NYSE:TWTR), Pembina Pipeline Corp (NYSE:PBA), and Chipotle Mexican Grill, Inc. (NYSE:CMG). This group of stocks’ market valuations are closest to PFG’s market valuation.

As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $1.38 billion. That figure was $119 million in PFG’s case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand Pembina Pipeline Corp (NYSE:PBA) is the least popular one with only 11 bullish hedge fund positions. Principal Financial Group Inc (NYSE:PFG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Advance Auto Parts, Inc. (NYSE:AAP) might be a better candidate to consider taking a long position in.

Disclosure: none