Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of PGT Innovations Inc. (NYSE:PGTI) based on that data.
Is PGTI a good stock to buy now? PGT Innovations Inc. (NYSE:PGTI) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of September. Our calculations also showed that PGTI 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). At the end of this article we will also compare PGTI to other stocks including EVO Payments, Inc. (NASDAQ:EVOP), Brooge Energy Limited (NASDAQ:BROG), and GMS Inc. (NYSE:GMS) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are viewed as slow, outdated investment tools of the past. While there are greater than 8000 funds trading at present, Our experts hone in on the leaders of this club, about 850 funds. These money managers control the majority of the smart money’s total capital, and by following their unrivaled picks, Insider Monkey has unearthed various investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 we’re going to check out the recent hedge fund action surrounding PGT Innovations Inc. (NYSE:PGTI).
Do Hedge Funds Think PGTI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in PGTI a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in PGT Innovations Inc. (NYSE:PGTI) was held by Renaissance Technologies, which reported holding $47.5 million worth of stock at the end of September. It was followed by Driehaus Capital with a $9.5 million position. Other investors bullish on the company included Arrowstreet Capital, Royce & Associates, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Driehaus Capital allocated the biggest weight to PGT Innovations Inc. (NYSE:PGTI), around 0.19% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.1 percent of its 13F equity portfolio to PGTI.
Due to the fact that PGT Innovations Inc. (NYSE:PGTI) has faced falling interest from the smart money, it’s easy to see that there is a sect of fund managers that slashed their full holdings in the third quarter. Interestingly, Ken Griffin’s Citadel Investment Group sold off the largest stake of all the hedgies monitored by Insider Monkey, comprising close to $0.8 million in stock. Paul Hondros’s fund, AlphaOne Capital Partners, also cut its stock, about $0.7 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as PGT Innovations Inc. (NYSE:PGTI) but similarly valued. These stocks are EVO Payments, Inc. (NASDAQ:EVOP), Brooge Energy Limited (NASDAQ:BROG), GMS Inc. (NYSE:GMS), US Ecology Inc. (NASDAQ:ECOL), AudioCodes Ltd. (NASDAQ:AUDC), Regenxbio Inc (NASDAQ:RGNX), and Live Oak Bancshares Inc (NASDAQ:LOB). This group of stocks’ market values are closest to PGTI’s market value.
|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 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $79 million in PGTI’s case. Regenxbio Inc (NASDAQ:RGNX) is the most popular stock in this table. On the other hand Brooge Energy Limited (NASDAQ:BROG) is the least popular one with only 6 bullish hedge fund positions. PGT Innovations Inc. (NYSE:PGTI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PGTI is 35.6. 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 PGTI as the stock returned 12.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.