Here’s What Hedge Funds Think About Polaris Industries Inc. (PII)

We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Polaris Industries Inc. (NYSE:PII) based on that data.

Polaris Industries Inc. (NYSE:PII) investors should pay attention to an increase in hedge fund interest lately. PII was in 16 hedge funds’ portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with PII positions at the end of the previous quarter. Our calculations also showed that pii isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Millennium Management, Catapult Capital Management

We’re going to check out the recent hedge fund action regarding Polaris Industries Inc. (NYSE:PII).

Hedge fund activity in Polaris Industries Inc. (NYSE:PII)

At Q1’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PII 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 PII Positions

Among these funds, Arrowstreet Capital held the most valuable stake in Polaris Industries Inc. (NYSE:PII), which was worth $19.3 million at the end of the first quarter. On the second spot was Interval Partners which amassed $18 million worth of shares. Moreover, Millennium Management, Alyeska Investment Group, and Citadel Investment Group were also bullish on Polaris Industries Inc. (NYSE:PII), allocating a large percentage of their portfolios to this stock.

As aggregate interest increased, specific money managers have been driving this bullishness. Interval Partners, managed by Gregg Moskowitz, created the most outsized position in Polaris Industries Inc. (NYSE:PII). Interval Partners had $18 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $9 million investment in the stock during the quarter. The other funds with new positions in the stock are Sara Nainzadeh’s Centenus Global Management, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Polaris Industries Inc. (NYSE:PII) but similarly valued. These stocks are Fluor Corporation (NYSE:FLR), Teradata Corporation (NYSE:TDC), United Therapeutics Corporation (NASDAQ:UTHR), and Chemed Corporation (NYSE:CHE). This group of stocks’ market values resemble PII’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FLR 22 311072 2
TDC 20 294027 -1
UTHR 21 1050522 -2
CHE 21 416451 -3
Average 21 518018 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $518 million. That figure was $89 million in PII’s case. Fluor Corporation (NYSE:FLR) is the most popular stock in this table. On the other hand Teradata Corporation (NYSE:TDC) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Polaris Industries Inc. (NYSE:PII) is even less popular than TDC. Hedge funds clearly dropped the ball on PII as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on PII as the stock returned 9.7% during the same period and outperformed the market by an even larger margin.

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