PennantPark Investment Corp. (NASDAQ:PNNT) has seen a decrease in activity from the world’s largest hedge funds lately.
At the moment, there are a multitude of methods investors can use to analyze Mr. Market. A pair of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can outclass the broader indices by a very impressive amount (see just how much).
Equally as key, positive insider trading sentiment is another way to parse down the marketplace. Obviously, there are a variety of motivations for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this method if piggybackers know where to look (learn more here).
With all of this in mind, we’re going to take a gander at the latest action surrounding PennantPark Investment Corp. (NASDAQ:PNNT).
What does the smart money think about PennantPark Investment Corp. (NASDAQ:PNNT)?
At the end of the fourth quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of -20% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, Clough Capital Partners, managed by Charles Clough, holds the largest position in PennantPark Investment Corp. (NASDAQ:PNNT). Clough Capital Partners has a $17.5 million position in the stock, comprising 0.6% of its 13F portfolio. On Clough Capital Partners’s heels is Silver Capital Management LLC, managed by Bruce Silver, which held a $4 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Cliff Asness’s AQR Capital Management, John Fichthorn’s Dialectic Capital Management and Bill Miller’s Legg Mason Capital Management.
Due to the fact that PennantPark Investment Corp. (NASDAQ:PNNT) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of funds that elected to cut their full holdings heading into 2013. It’s worth mentioning that Brian Taylor’s Pine River Capital Management cut the biggest stake of the 450+ funds we key on, totaling close to $5.1 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund dumped about $3.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds heading into 2013.
Insider trading activity in PennantPark Investment Corp. (NASDAQ:PNNT)
Insider buying is best served when the company in focus has seen transactions within the past six months. Over the last half-year time frame, PennantPark Investment Corp. (NASDAQ:PNNT) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to PennantPark Investment Corp. (NASDAQ:PNNT). These stocks are Westwood Holdings Group, Inc. (NYSE:WHG), Capital Southwest Corporation (NASDAQ:CSWC), THL Credit, Inc. (NASDAQ:TCRD), Pzena Investment Management, Inc. (NYSE:PZN), and Noah Holdings Limited (ADR) (NYSE:NOAH). This group of stocks are in the asset management industry and their market caps are closest to PNNT’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Westwood Holdings Group, Inc. (NYSE:WHG)||5||0||6|
|Capital Southwest Corporation (NASDAQ:CSWC)||3||2||4|
|THL Credit, Inc. (NASDAQ:TCRD)||9||5||0|
|Pzena Investment Management, Inc. (NYSE:PZN)||3||0||0|
|Noah Holdings Limited (ADR) (NYSE:NOAH)||3||0||0|
With the results shown by our tactics, retail investors should always pay attention to hedge fund and insider trading activity, and PennantPark Investment Corp. (NASDAQ:PNNT) shareholders fit into this picture quite nicely.