In this article we will take a look at whether hedge funds think PPG Industries, Inc. (NYSE:PPG) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is PPG a good stock to buy? PPG Industries, Inc. (NYSE:PPG) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 36 hedge funds’ portfolios at the end of September. Our calculations also showed that PPG 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 PPG to other stocks including Best Buy Co., Inc. (NYSE:BBY), Match Group, Inc. (NASDAQ:MTCH), and Paychex, Inc. (NASDAQ:PAYX) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a multitude of metrics stock traders can use to grade publicly traded companies. A couple of the most under-the-radar metrics are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top fund managers can outclass their index-focused peers by a very impressive margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Now let’s take a look at the recent hedge fund action regarding PPG Industries, Inc. (NYSE:PPG).
Do Hedge Funds Think PPG Is A Good Stock To Buy Now?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PPG over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Israel Englander’s Millennium Management has the number one position in PPG Industries, Inc. (NYSE:PPG), worth close to $42.9 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $37.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Phill Gross and Robert Atchinson’s Adage Capital Management, Benjamin A. Smith’s Laurion Capital Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Appian Way Asset Management allocated the biggest weight to PPG Industries, Inc. (NYSE:PPG), around 5.26% of its 13F portfolio. Iszo Capital is also relatively very bullish on the stock, designating 3.49 percent of its 13F equity portfolio to PPG.
Due to the fact that PPG Industries, Inc. (NYSE:PPG) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies who were dropping their positions entirely by the end of the third quarter. Interestingly, Greg Poole’s Echo Street Capital Management dumped the largest stake of all the hedgies followed by Insider Monkey, valued at close to $34.3 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $28.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as PPG Industries, Inc. (NYSE:PPG) but similarly valued. We will take a look at Best Buy Co., Inc. (NYSE:BBY), Match Group, Inc. (NASDAQ:MTCH), Paychex, Inc. (NASDAQ:PAYX), Peloton Interactive, Inc. (NASDAQ:PTON), Eversource Energy (NYSE:ES), CRH PLC (NYSE:CRH), and Zimmer Biomet Holdings Inc (NYSE:ZBH). This group of stocks’ market caps are closest to PPG’s market cap.
|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 38.4 hedge funds with bullish positions and the average amount invested in these stocks was $1395 million. That figure was $231 million in PPG’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 7 bullish hedge fund positions. PPG Industries, Inc. (NYSE:PPG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PPG is 53. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on PPG as the stock returned 19.6% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.