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Is Patterson Companies, Inc. (PDCO) A Good Stock To Buy?

We can judge whether Patterson Companies, Inc. (NASDAQ:PDCO) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.

Patterson Companies, Inc. (NASDAQ:PDCO) was in 28 hedge funds’ portfolios at the end of the fourth quarter of 2018. PDCO has seen a decrease in hedge fund sentiment in recent months. There were 29 hedge funds in our database with PDCO positions at the end of the previous quarter. Our calculations also showed that pdco isn’t among the 30 most popular stocks among hedge funds.

Today there are plenty of gauges stock traders use to appraise their holdings. A pair of the less known gauges are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best money managers can outpace the market by a solid margin (see the details here).

Dmitry Balyasny

Let’s take a peek at the latest hedge fund action encompassing Patterson Companies, Inc. (NASDAQ:PDCO).

Hedge fund activity in Patterson Companies, Inc. (NASDAQ:PDCO)

At the end of the fourth quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. On the other hand, there were a total of 26 hedge funds with a bullish position in PDCO a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with PDCO Positions

More specifically, GAMCO Investors was the largest shareholder of Patterson Companies, Inc. (NASDAQ:PDCO), with a stake worth $35.3 million reported as of the end of September. Trailing GAMCO Investors was Two Sigma Advisors, which amassed a stake valued at $24.9 million. Citadel Investment Group, Balyasny Asset Management, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.

Due to the fact that Patterson Companies, Inc. (NASDAQ:PDCO) has faced falling interest from hedge fund managers, it’s easy to see that there was a specific group of fund managers that elected to cut their full holdings by the end of the third quarter. It’s worth mentioning that John W. Rende’s Copernicus Capital Management cut the largest stake of the 700 funds watched by Insider Monkey, valued at about $4.2 million in call options, and Israel Englander’s Millennium Management was right behind this move, as the fund dropped about $1.8 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Patterson Companies, Inc. (NASDAQ:PDCO). We will take a look at Itron, Inc. (NASDAQ:ITRI), Union Bankshares Corporation (NASDAQ:UBSH), Cronos Group Inc. (NASDAQ:CRON), and Hamilton Lane Incorporated (NASDAQ:HLNE). This group of stocks’ market caps match PDCO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ITRI 14 449429 -3
UBSH 6 24227 2
CRON 6 10449 -6
HLNE 9 40521 -3
Average 8.75 131157 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $215 million in PDCO’s case. Itron, Inc. (NASDAQ:ITRI) is the most popular stock in this table. On the other hand Union Bankshares Corporation (NASDAQ:UBSH) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Patterson Companies, Inc. (NASDAQ:PDCO) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately PDCO wasn’t nearly as popular as these 15 stock and hedge funds that were betting on PDCO were disappointed as the stock returned 9.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

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

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