We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR) based on that data.
Is Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR) going to take off soon? Money managers were getting more optimistic. The number of bullish hedge fund bets advanced by 3 lately. Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR) was in 27 hedge funds’ portfolios at the end of March. The all time high for this statistic is 35. Our calculations also showed that PBR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 24 hedge funds in our database with PBR positions at the end of the fourth quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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Do Hedge Funds Think PBR Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. On the other hand, there were a total of 32 hedge funds with a bullish position in PBR a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the number one position in Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR). Fisher Asset Management has a $318.8 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $95.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism comprise Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Jon Bauer’s Contrarian Capital. In terms of the portfolio weights assigned to each position Contrarian Capital allocated the biggest weight to Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR), around 10.47% of its 13F portfolio. Oldfield Partners is also relatively very bullish on the stock, dishing out 4.47 percent of its 13F equity portfolio to PBR.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR). Arrowstreet Capital had $95.6 million invested in the company at the end of the quarter. Jon Bauer’s Contrarian Capital also made a $49.8 million investment in the stock during the quarter. The following funds were also among the new PBR investors: Alan Howard’s Brevan Howard, Noam Gottesman’s GLG Partners, and Israel Englander’s Millennium Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR) but similarly valued. We will take a look at Stellantis N.V. (NYSE:STLA), ICICI Bank Limited (NYSE:IBN), UBS Group AG (NYSE:UBS), Eaton Corporation plc (NYSE:ETN), Boston Scientific Corporation (NYSE:BSX), Waste Management, Inc. (NYSE:WM), and Emerson Electric Co. (NYSE:EMR). This group of stocks’ market caps are closest to PBR’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 34 hedge funds with bullish positions and the average amount invested in these stocks was $1580 million. That figure was $878 million in PBR’s case. Eaton Corporation plc (NYSE:ETN) is the most popular stock in this table. On the other hand UBS Group AG (NYSE:UBS) is the least popular one with only 16 bullish hedge fund positions. Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PBR is 47.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. A small number of hedge funds were also right about betting on PBR as the stock returned 32.9% since the end of the first quarter (through 7/9) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.