“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards PTC Inc (NASDAQ:PTC) and see how it was affected.
PTC Inc (NASDAQ:PTC) investors should pay attention to an increase in hedge fund interest lately. Our calculations also showed that PTC isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to the beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the recent hedge fund action surrounding PTC Inc (NASDAQ:PTC).
What does the smart money think about PTC Inc (NASDAQ:PTC)?
At Q3’s end, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the previous quarter. The graph below displays the number of hedge funds with a bullish position in PTC over the last 13 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, OZ Management, managed by Daniel S. Och, holds the most valuable position in PTC Inc (NASDAQ:PTC). OZ Management has a $212.2 million position in the stock, comprising 1.2% of its 13F portfolio. The second largest stake is held by Kevin Oram and Peter Uddo of Praesidium Investment Management Company, with a $191 million position; the fund has 13.3% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions consist of Ian Simm’s Impax Asset Management, Robert Boucai’s Newbrook Capital Advisors and Douglas Dossey and Arthur Young’s Tensile Capital.
As industrywide interest jumped, key money managers were breaking ground themselves. Point State Capital, managed by Zach Schreiber, established the most outsized position in PTC Inc (NASDAQ:PTC). Point State Capital had $67.3 million invested in the company at the end of the quarter. Alex Sacerdote’s Whale Rock Capital Management also initiated a $38 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Robert Joseph Caruso’s Select Equity Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as PTC Inc (NASDAQ:PTC) but similarly valued. We will take a look at Cincinnati Financial Corporation (NASDAQ:CINF), Advance Auto Parts, Inc. (NYSE:AAP), Kohl’s Corporation (NYSE:KSS), and Keysight Technologies Inc (NYSE:KEYS). This group of stocks’ market values resembles PTC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CINF | 11 | 527191 | -4 |
| AAP | 38 | 1776005 | 9 |
| KSS | 29 | 954349 | 3 |
| KEYS | 29 | 630589 | 3 |
| Average | 26.75 | 972 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $972 million. That figure was $1630 million in PTC’s case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand, Cincinnati Financial Corporation (NASDAQ:CINF) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks PTC Inc (NASDAQ:PTC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
