World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Is Patrick Industries, Inc. (NASDAQ:PATK) going to take off soon? The best stock pickers are taking a pessimistic view. The number of bullish hedge fund bets went down by 1 in recent months. PATK was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 19 hedge funds in our database with PATK positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Pier 1 Imports, Inc. (NYSE:PIR), FARO Technologies, Inc. (NASDAQ:FARO), and Altra Holdings, Inc. (NASDAQ:AIMC) to gather more data points.
Keeping this in mind, we’re going to take a gander at the fresh action surrounding Patrick Industries, Inc. (NASDAQ:PATK).
What does the smart money think about Patrick Industries, Inc. (NASDAQ:PATK)?
Heading into Q4, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Tontine Asset Management, managed by Jeffrey Gendell, holds the number one position in Patrick Industries, Inc. (NASDAQ:PATK). Tontine Asset Management has a $73.7 million position in the stock, comprising 15.3% of its 13F portfolio. Sitting at the No. 2 spot is Driehaus Capital, led by Richard Driehaus, holding a $5.5 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish consist of D E Shaw, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Seeing as Patrick Industries, Inc. (NASDAQ:PATK) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers who were dropping their full holdings heading into Q4. At the top of the heap, Julian Allen’s Spitfire Capital said goodbye to the largest stake of the 700 funds monitored by Insider Monkey, totaling about $5.9 million in stock. Mark Coe’s fund, Coe Capital Management, also dumped its stock, about $0.8 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to Patrick Industries, Inc. (NASDAQ:PATK). These stocks are Pier 1 Imports, Inc. (NYSE:PIR), FARO Technologies, Inc. (NASDAQ:FARO), Altra Holdings, Inc. (NASDAQ:AIMC), and CTS Corporation (NYSE:CTS). This group of stocks’ market values are closest to PATK’s market value.
|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 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $106 million in PATK’s case. Pier 1 Imports, Inc. (NYSE:PIR) is the most popular stock in this table. On the other hand FARO Technologies, Inc. (NASDAQ:FARO) is the least popular one with only 7 bullish hedge fund positions. Patrick Industries, Inc. (NASDAQ:PATK) 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. In this regard PIR might be a better candidate to consider a long position.