We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards PGT, Inc. (NASDAQ:PGTI), and what that likely means for the prospects of the company and its stock.
Is PGT, Inc. (NASDAQ:PGTI) a safe investment today? Prominent investors are betting on the stock. The number of long hedge fund positions strengthened by 1 recently. PGTI was in 14 hedge funds’ portfolios at the end of the third quarter of 2016. There were 13 hedge funds in our database with PGTI positions at the end of the previous quarter. At the end of this article we will also compare PGTI to other stocks including Chromcraft Revington, Inc. (NYSEAMEX:CRC), Ennis, Inc. (NYSE:EBF), and Momo Inc (ADR) (NASDAQ:MOMO) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Hedge fund activity in PGT, Inc. (NASDAQ:PGTI)
Heading into the fourth quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 8% from one quarter earlier, pushing bullish hedge fund positions to a yearly high. The graph below displays the number of hedge funds with bullish position in PGTI over the last 5 quarters. So, let’s review 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, Renaissance Technologies, founded by Jim Simons, holds the biggest position in PGT, Inc. (NASDAQ:PGTI). Renaissance Technologies has a $29.4 million position in the stock. The second largest stake is held by Chuck Royce of Royce & Associates, with a $12.3 million position. Some other peers that are bullish contain Paul Reeder and Edward Shapiro’s PAR Capital Management, Craig C. Albert’s Sheffield Asset Management, and Richard Driehaus’ Driehaus Capital. 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.