It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Piper Jaffray Companies (NYSE:PJC).
Is Piper Jaffray Companies (NYSE:PJC) the right investment to pursue these days? Prominent investors are indeed buying. The number of bullish hedge fund investments went up by 1 lately. PJC was in 7 hedge funds’ portfolios at the end of September. There were 6 hedge funds in our database with PJC holdings at the end of the previous quarter. At the end of this article we will also compare PJC to other stocks including Silver Spring Networks Inc (NYSE:SSNI), Pacific Premier Bancorp, Inc. (NASDAQ:PPBI), and Novocure Ltd (NASDAQ:NVCR) to get a better sense of its popularity.
Keeping this in mind, we’re going to review the latest action regarding Piper Jaffray Companies (NYSE:PJC).
What does the smart money think about Piper Jaffray Companies (NYSE:PJC)?
Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PJC over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, AQR Capital Management, led by Cliff Asness, holds the number one position in Piper Jaffray Companies (NYSE:PJC). AQR Capital Management has a $7.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On AQR Capital Management’s heels is Fisher Asset Management, led by Ken Fisher, which holds a $4.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies, one of the largest hedge funds in the world, and Mike Vranos’s Ellington. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in Piper Jaffray Companies (NYSE:PJC). Arrowstreet Capital had $2.4 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new PJC position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Piper Jaffray Companies (NYSE:PJC) but similarly valued. These stocks are Silver Spring Networks Inc (NYSE:SSNI), Pacific Premier Bancorp, Inc. (NASDAQ:PPBI), Novocure Ltd (NASDAQ:NVCR), and Kelly Services, Inc. (NASDAQ:KELYA). All of these stocks’ market caps resemble PJC’s market cap.
|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 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $16 million in PJC’s case. Silver Spring Networks Inc (NYSE:SSNI) is the most popular stock in this table. On the other hand Novocure Ltd (NASDAQ:NVCR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Piper Jaffray Companies (NYSE:PJC) is even less popular than NVCR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.