We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Peoples Financial Services Corp. (NASDAQ:PFIS).
Is PFIS a good stock to buy? Investors who are in the know were buying. The number of bullish hedge fund bets improved by 1 lately. Peoples Financial Services Corp. (NASDAQ:PFIS) was in 3 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 2. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PFIS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 2 hedge funds in our database with PFIS holdings at the end of December.
In the financial world there are tons of metrics stock traders have at their disposal to appraise publicly traded companies. A duo of the most useful metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outclass the broader indices by a significant margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Roger Ibbotson of Zebra Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s review the new hedge fund action surrounding Peoples Financial Services Corp. (NASDAQ:PFIS).
Do Hedge Funds Think PFIS Is A Good Stock To Buy Now?
At the end of March, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PFIS over the last 23 quarters. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Peoples Financial Services Corp. (NASDAQ:PFIS), with a stake worth $2.2 million reported as of the end of March. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $0.7 million. Zebra Capital Management was 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 Zebra Capital Management allocated the biggest weight to Peoples Financial Services Corp. (NASDAQ:PFIS), around 0.23% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0027 percent of its 13F equity portfolio to PFIS.
As aggregate interest increased, some big names have been driving this bullishness. Zebra Capital Management, managed by Roger Ibbotson, assembled the most valuable position in Peoples Financial Services Corp. (NASDAQ:PFIS). Zebra Capital Management had $0.2 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks similar to Peoples Financial Services Corp. (NASDAQ:PFIS). These stocks are Tyme Technologies, Inc. (NASDAQ:TYME), GP Strategies Corporation (NYSE:GPX), Pioneer Bancorp, Inc. (NASDAQ:PBFS), NN, Inc. (NASDAQ:NNBR), HC2 Holdings Inc (NYSE:HCHC), VistaGen Therapeutics, Inc. (NASDAQ:VTGN), and Landmark Infrastructure Partners LP (NASDAQ:LMRK). All of these stocks’ market caps are closest to PFIS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TYME | 5 | 3243 | 4 |
| GPX | 9 | 47058 | 0 |
| PBFS | 1 | 121 | -1 |
| NNBR | 10 | 63948 | 2 |
| HCHC | 11 | 25421 | 0 |
| VTGN | 15 | 92423 | -1 |
| LMRK | 2 | 917 | 0 |
| Average | 7.6 | 33304 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.6 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $3 million in PFIS’s case. VistaGen Therapeutics, Inc. (NASDAQ:VTGN) is the most popular stock in this table. On the other hand Pioneer Bancorp, Inc. (NASDAQ:PBFS) is the least popular one with only 1 bullish hedge fund positions. Peoples Financial Services Corp. (NASDAQ:PFIS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PFIS is 43.1. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately PFIS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PFIS investors were disappointed as the stock returned 5.3% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Disclosure: None. This article was originally published at Insider Monkey.
