In this article we will take a look at whether hedge funds think PAR Technology Corporation (NYSE:PAR) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is PAR a good stock to buy now? The best stock pickers were getting more bullish. The number of long hedge fund bets increased by 2 in recent months. PAR Technology Corporation (NYSE:PAR) was in 12 hedge funds’ portfolios at the end of September. The all time high for this statistics is 12. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PAR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 10 hedge funds in our database with PAR holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a large number of indicators stock market investors put to use to size up their stock investments. Some of the less utilized indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the market by a healthy amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let’s take a look at the recent hedge fund action regarding PAR Technology Corporation (NYSE:PAR).
Do Hedge Funds Think PAR Is A Good Stock To Buy Now?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in PAR over the last 21 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Among these funds, ADW Capital held the most valuable stake in PAR Technology Corporation (NYSE:PAR), which was worth $73.9 million at the end of the third quarter. On the second spot was Nine Ten Partners which amassed $58.4 million worth of shares. Royce & Associates, Greenhaven Road Investment Management, and Atreides Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position ADW Capital allocated the biggest weight to PAR Technology Corporation (NYSE:PAR), around 43.05% of its 13F portfolio. Greenhaven Road Investment Management is also relatively very bullish on the stock, dishing out 14.07 percent of its 13F equity portfolio to PAR.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Engineers Gate Manager, managed by Greg Eisner, assembled the most valuable position in PAR Technology Corporation (NYSE:PAR). Engineers Gate Manager had $0.8 million invested in the company at the end of the quarter. Harry Gail’s Harspring Capital Management also initiated a $0.4 million position during the quarter.
Let’s also examine hedge fund activity in other stocks similar to PAR Technology Corporation (NYSE:PAR). We will take a look at Guess’, Inc. (NYSE:GES), Antero Resources Corp (NYSE:AR), Rosetta Stone Inc (NYSE:RST), Costamare Inc (NYSE:CMRE), Axcelis Technologies Inc (NASDAQ:ACLS), China Yuchai International Limited (NYSE:CYD), and Benchmark Electronics, Inc. (NYSE:BHE). This group of stocks’ market caps match PAR’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.7 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $282 million in PAR’s case. Rosetta Stone Inc (NYSE:RST) is the most popular stock in this table. On the other hand China Yuchai International Limited (NYSE:CYD) is the least popular one with only 10 bullish hedge fund positions. PAR Technology Corporation (NYSE:PAR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PAR is 43.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on PAR as the stock returned 42.8% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.