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Here’s What Hedge Funds Think About PerkinElmer, Inc. (PKI)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31, so let’s proceed with the discussion of the hedge fund sentiment on PerkinElmer, Inc. (NYSE:PKI).

Is PerkinElmer, Inc. (NYSE:PKI) going to take off soon? Money managers are taking a bullish view. The number of bullish hedge fund bets rose by 6 in recent months. Our calculations also showed that pki isn’t among the 30 most popular stocks among hedge funds. PKI was in 25 hedge funds’ portfolios at the end of March. There were 19 hedge funds in our database with PKI positions at the end of the previous quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

FISHER ASSET MANAGEMENT

We’re going to view the key hedge fund action encompassing PerkinElmer, Inc. (NYSE:PKI).

Hedge fund activity in PerkinElmer, Inc. (NYSE:PKI)

At Q1’s end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 32% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in PKI over the last 15 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 PKI Positions

Among these funds, Select Equity Group held the most valuable stake in PerkinElmer, Inc. (NYSE:PKI), which was worth $837 million at the end of the first quarter. On the second spot was Impax Asset Management which amassed $53.9 million worth of shares. Moreover, Echo Street Capital Management, Partner Fund Management, and Fisher Asset Management were also bullish on PerkinElmer, Inc. (NYSE:PKI), allocating a large percentage of their portfolios to this stock.

With a general bullishness amongst the heavyweights, some big names have jumped into PerkinElmer, Inc. (NYSE:PKI) headfirst. Partner Fund Management, managed by Christopher James, created the most valuable position in PerkinElmer, Inc. (NYSE:PKI). Partner Fund Management had $45.5 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $4.5 million position during the quarter. The other funds with new positions in the stock are Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Matthew Tewksbury’s Stevens Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as PerkinElmer, Inc. (NYSE:PKI) but similarly valued. These stocks are Take-Two Interactive Software, Inc. (NASDAQ:TTWO), China Southern Airlines Co Ltd (NYSE:ZNH), NiSource Inc. (NYSE:NI), and Cboe Global Markets, Inc. (BATS:CBOE). This group of stocks’ market caps match PKI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TTWO 50 1424808 -8
ZNH 3 18911 -1
NI 18 691077 2
CBOE 22 881706 -2
Average 23.25 754126 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $754 million. That figure was $1118 million in PKI’s case. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is the most popular stock in this table. On the other hand China Southern Airlines Co Ltd (NYSE:ZNH) is the least popular one with only 3 bullish hedge fund positions. PerkinElmer, Inc. (NYSE:PKI) 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 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately PKI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PKI were disappointed as the stock returned -10.8% during the same 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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

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