In this article we will analyze whether Planet Fitness Inc (NYSE:PLNT) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is Planet Fitness Inc (NYSE:PLNT) an outstanding investment today? Prominent investors were taking an optimistic view. The number of bullish hedge fund bets improved by 6 in recent months. Planet Fitness Inc (NYSE:PLNT) was in 40 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 47. Our calculations also showed that PLNT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 34 hedge funds in our database with PLNT 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 peek at the new hedge fund action surrounding Planet Fitness Inc (NYSE:PLNT).
Eric Mandelblatt of Soroban Capital Partners
Do Hedge Funds Think PLNT Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in PLNT over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, SRS Investment Management, managed by Karthik Sarma, holds the largest position in Planet Fitness Inc (NYSE:PLNT). SRS Investment Management has a $553.6 million position in the stock, comprising 7.8% of its 13F portfolio. On SRS Investment Management’s heels is Soroban Capital Partners, led by Eric W. Mandelblatt and Gaurav Kapadia, holding a $251 million position; 2.4% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism contain Brandon Haley’s Holocene Advisors, Alexander Mitchell’s Scopus Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Deep Field Asset Management allocated the biggest weight to Planet Fitness Inc (NYSE:PLNT), around 13.02% of its 13F portfolio. Yost Capital Management is also relatively very bullish on the stock, designating 10.08 percent of its 13F equity portfolio to PLNT.
As industrywide interest jumped, specific money managers were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, created the largest position in Planet Fitness Inc (NYSE:PLNT). Holocene Advisors had $82.7 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $61.6 million investment in the stock during the quarter. The other funds with brand new PLNT positions are Phill Gross and Robert Atchinson’s Adage Capital Management, Benjamin A. Smith’s Laurion Capital Management, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Planet Fitness Inc (NYSE:PLNT) but similarly valued. We will take a look at Change Healthcare Inc. (NASDAQ:CHNG), Arrowhead Pharmaceuticals Inc. (NASDAQ:ARWR), Virgin Galactic Holdings, Inc. (NYSE:SPCE), Varonis Systems Inc (NASDAQ:VRNS), First Financial Bankshares Inc (NASDAQ:FFIN), Healthcare Trust Of America Inc (NYSE:HTA), and Mattel, Inc. (NASDAQ:MAT). This group of stocks’ market caps are closest to PLNT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHNG | 50 | 1557603 | -1 |
| ARWR | 24 | 150783 | -6 |
| SPCE | 16 | 105669 | -2 |
| VRNS | 27 | 298396 | 3 |
| FFIN | 20 | 81284 | 12 |
| HTA | 14 | 381781 | -9 |
| MAT | 34 | 1030578 | 9 |
| Average | 26.4 | 515156 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $515 million. That figure was $1516 million in PLNT’s case. Change Healthcare Inc. (NASDAQ:CHNG) is the most popular stock in this table. On the other hand Healthcare Trust Of America Inc (NYSE:HTA) is the least popular one with only 14 bullish hedge fund positions. Planet Fitness Inc (NYSE:PLNT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PLNT is 71.6. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately PLNT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PLNT were disappointed as the stock returned 4% since the end of September (through 11/30) 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.
