The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Penumbra Inc (NYSE:PEN) and determine whether the smart money was really smart about this stock.
Is Penumbra Inc (NYSE:PEN) the right investment to pursue these days? Investors who are in the know were becoming hopeful. The number of bullish hedge fund positions rose by 3 in recent months. Penumbra Inc (NYSE:PEN) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PEN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 30 hedge funds in our database with PEN holdings at the end of June.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks 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. With all of this in mind let’s take a gander at the latest hedge fund action encompassing Penumbra Inc (NYSE:PEN).
William Harnisch of Peconic Partners LLC
Do Hedge Funds Think PEN Is A Good Stock To Buy Now?
At third quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PEN over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Penumbra Inc (NYSE:PEN) was held by Citadel Investment Group, which reported holding $120.4 million worth of stock at the end of September. It was followed by Millennium Management with a $111.1 million position. Other investors bullish on the company included Point72 Asset Management, Adage Capital Management, and Partner Fund Management. In terms of the portfolio weights assigned to each position Engine No. 1 LLC allocated the biggest weight to Penumbra Inc (NYSE:PEN), around 4.02% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, setting aside 1.39 percent of its 13F equity portfolio to PEN.
As industrywide interest jumped, key money managers have been driving this bullishness. Pura Vida Investments, managed by Efrem Kamen, created the biggest position in Penumbra Inc (NYSE:PEN). Pura Vida Investments had $8 million invested in the company at the end of the quarter. William Harnisch’s Peconic Partners LLC also made a $2.2 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding’s Winton Capital Management, D. E. Shaw’s D E Shaw, and Peter Algert’s Algert Global.
Let’s also examine hedge fund activity in other stocks similar to Penumbra Inc (NYSE:PEN). These stocks are A. O. Smith Corporation (NYSE:AOS), Manhattan Associates, Inc. (NASDAQ:MANH), McAfee Corp. (NASDAQ:MCFE), CyrusOne Inc (NASDAQ:CONE), Lithia Motors Inc (NYSE:LAD), Amdocs Limited (NASDAQ:DOX), and NiSource Inc. (NYSE:NI). All of these stocks’ market caps are similar to PEN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AOS | 29 | 564878 | 3 |
| MANH | 25 | 475224 | -3 |
| MCFE | 31 | 330697 | 13 |
| CONE | 27 | 495607 | 1 |
| LAD | 64 | 2823225 | 1 |
| DOX | 24 | 824398 | -5 |
| NI | 24 | 435539 | -12 |
| Average | 32 | 849938 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $850 million. That figure was $554 million in PEN’s case. Lithia Motors Inc (NYSE:LAD) is the most popular stock in this table. On the other hand Amdocs Limited (NYSE:DOX) is the least popular one with only 24 bullish hedge fund positions. Penumbra Inc (NYSE:PEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PEN is 49.3. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, PEN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PEN were disappointed as the stock returned -15.2% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Penumbra Inc (NYSE:PEN)
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Disclosure: None. This article was originally published at Insider Monkey.
