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Is PBF Energy Inc (PBF) A Good Stock To Buy?

We at Insider Monkey have gone over 700 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 December 31st. In this article, we look at what those funds think of PBF Energy Inc (NYSE:PBF) based on that data.

PBF Energy Inc (NYSE:PBF) was in 18 hedge funds’ portfolios at the end of December. PBF has seen a decrease in support from the world’s most elite money managers recently. There were 29 hedge funds in our database with PBF positions at the end of the previous quarter. Our calculations also showed that PBF isn’t among the 30 most popular stocks among hedge funds.

According to most investors, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation today, Our experts look at the crème de la crème of this club, about 750 funds. Most estimates calculate that this group of people handle the majority of the smart money’s total capital, and by shadowing their unrivaled investments, Insider Monkey has formulated various investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by nearly 5 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.

Ken-Heebner

Let’s take a look at the fresh hedge fund action encompassing PBF Energy Inc (NYSE:PBF).

How have hedgies been trading PBF Energy Inc (NYSE:PBF)?

At the end of the fourth quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -38% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in PBF a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

PBF_apr2019

The largest stake in PBF Energy Inc (NYSE:PBF) was held by AQR Capital Management, which reported holding $219.6 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $39.5 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and Capital Growth Management.

Because PBF Energy Inc (NYSE:PBF) has faced falling interest from the smart money, logic holds that there exists a select few fund managers that elected to cut their entire stakes heading into Q3. It’s worth mentioning that Aaron Cowen’s Suvretta Capital Management said goodbye to the largest stake of all the hedgies followed by Insider Monkey, valued at about $72.2 million in stock, and John Brennan’s Sirios Capital Management was right behind this move, as the fund dropped about $38 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 11 funds heading into Q3.

Let’s now take a look at hedge fund activity in other stocks similar to PBF Energy Inc (NYSE:PBF). We will take a look at Jabil Inc. (NYSE:JBL), First Financial Bankshares Inc (NASDAQ:FFIN), Insperity Inc (NYSE:NSP), and Flowers Foods, Inc. (NYSE:FLO). This group of stocks’ market valuations are similar to PBF’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
JBL 20 316036 -2
FFIN 6 6455 0
NSP 24 262674 8
FLO 20 196727 0
Average 17.5 195473 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $195 million. That figure was $394 million in PBF’s case. Insperity Inc (NYSE:NSP) is the most popular stock in this table. On the other hand First Financial Bankshares Inc (NASDAQ:FFIN) is the least popular one with only 6 bullish hedge fund positions. PBF Energy Inc (NYSE:PBF) 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 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 PBF wasn’t nearly as popular as these 15 stock and hedge funds that were betting on PBF were disappointed as the stock returned 6.2% 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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