Is Plantronics, Inc. (NYSE:PLT) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is PLT a good stock to buy now? Prominent investors were becoming hopeful. The number of long hedge fund positions rose by 4 recently. Plantronics, Inc. (NYSE:PLT) was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 25. Our calculations also showed that PLT 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). There were 10 hedge funds in our database with PLT holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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. With all of this in mind we’re going to take a look at the new hedge fund action regarding Plantronics, Inc. (NYSE:PLT).
Do Hedge Funds Think PLT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards PLT over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pzena Investment Management held the most valuable stake in Plantronics, Inc. (NYSE:PLT), which was worth $11.9 million at the end of the third quarter. On the second spot was VIEX Capital Advisors which amassed $3.4 million worth of shares. Tudor Investment Corp, Citadel Investment Group, and GMT Capital were 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 VIEX Capital Advisors allocated the biggest weight to Plantronics, Inc. (NYSE:PLT), around 3.23% of its 13F portfolio. Sound Point Capital is also relatively very bullish on the stock, designating 0.97 percent of its 13F equity portfolio to PLT.
Now, key money managers have jumped into Plantronics, Inc. (NYSE:PLT) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, established the most outsized position in Plantronics, Inc. (NYSE:PLT). Tudor Investment Corp had $2.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $1.3 million investment in the stock during the quarter. The other funds with brand new PLT positions are Thomas E. Claugus’s GMT Capital, Dmitry Balyasny’s Balyasny Asset Management, and Renaissance Technologies.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Plantronics, Inc. (NYSE:PLT) but similarly valued. We will take a look at Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), MagnaChip Semiconductor Corporation (NYSE:MX), Preferred Bank (NASDAQ:PFBC), Ocular Therapeutix Inc (NASDAQ:OCUL), Allegiance Bancshares, Inc. (NASDAQ:ABTX), AVROBIO, Inc. (NASDAQ:AVRO), and Golden Star Resources Ltd. (NYSE:GSS). This group of stocks’ market values are closest to PLT’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 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $20 million in PLT’s case. MagnaChip Semiconductor Corporation (NYSE:MX) is the most popular stock in this table. On the other hand Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX) is the least popular one with only 2 bullish hedge fund positions. Plantronics, Inc. (NYSE:PLT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PLT is 49.8. 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. Hedge funds were also right about betting on PLT as the stock returned 131.7% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.