Where Do Hedge Funds Stand On PLBY Group, Inc. (PLBY)?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is PLBY Group, Inc. (NASDAQ:PLBY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

PLBY Group, Inc. (NASDAQ:PLBY) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. PLBY has seen an increase in activity from the world’s largest hedge funds recently. There were 13 hedge funds in our database with PLBY positions at the end of the first quarter. Our calculations also showed that PLBY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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 79 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, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to take a peek at the fresh hedge fund action regarding PLBY Group, Inc. (NASDAQ:PLBY).

Do Hedge Funds Think PLBY Is A Good Stock To Buy Now?

At the end of June, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 54% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in PLBY over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Scopus Asset Management held the most valuable stake in PLBY Group, Inc. (NASDAQ:PLBY), which was worth $33.1 million at the end of the second quarter. On the second spot was Greenlight Capital which amassed $15.9 million worth of shares. ADW Capital, Citadel Investment Group, and Berylson Capital Partners 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 ADW Capital allocated the biggest weight to PLBY Group, Inc. (NASDAQ:PLBY), around 4.58% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, setting aside 2.61 percent of its 13F equity portfolio to PLBY.

With a general bullishness amongst the heavyweights, specific money managers have jumped into PLBY Group, Inc. (NASDAQ:PLBY) headfirst. Scopus Asset Management, managed by Alexander Mitchell, assembled the largest position in PLBY Group, Inc. (NASDAQ:PLBY). Scopus Asset Management had $33.1 million invested in the company at the end of the quarter. David Einhorn’s Greenlight Capital also made a $15.9 million investment in the stock during the quarter. The other funds with new positions in the stock are James Thomas Berylson’s Berylson Capital Partners, Alok Agrawal’s Bloom Tree Partners, and Anand Parekh’s Alyeska Investment Group.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as PLBY Group, Inc. (NASDAQ:PLBY) but similarly valued. We will take a look at U.S. Physical Therapy, Inc. (NYSE:USPH), Alphatec Holdings Inc (NASDAQ:ATEC), Bonanza Creek Energy Inc (NYSE:BCEI), Noble Corporation (NYSE:NE), Tennant Company (NYSE:TNC), MGP Ingredients Inc (NASDAQ:MGPI), and Omega Flex, Inc. (NASDAQ:OFLX). This group of stocks’ market valuations match PLBY’s market valuation.

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As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $105 million. That figure was $137 million in PLBY’s case. Bonanza Creek Energy Inc (NYSE:BCEI) is the most popular stock in this table. On the other hand Omega Flex, Inc. (NASDAQ:OFLX) is the least popular one with only 3 bullish hedge fund positions. PLBY Group, Inc. (NASDAQ:PLBY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PLBY is 87.2. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 October 22nd and beat the market again by 1.6 percentage points. Unfortunately PLBY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PLBY were disappointed as the stock returned -29% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.