We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of People’s United Financial, Inc. (NASDAQ:PBCT) based on that data.
People’s United Financial, Inc. (NASDAQ:PBCT) has seen a decrease in hedge fund sentiment of late. People’s United Financial, Inc. (NASDAQ:PBCT) was in 20 hedge funds’ portfolios at the end of March. The all time high for this statistic is 29. Our calculations also showed that PBCT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Matthew Halbower of Pentwater Capital
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Do Hedge Funds Think PBCT Is A Good Stock To Buy Now?
At first quarter’s end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -31% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PBCT over the last 23 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Magnetar Capital held the most valuable stake in People’s United Financial, Inc. (NASDAQ:PBCT), which was worth $126.4 million at the end of the fourth quarter. On the second spot was Pentwater Capital Management which amassed $21.4 million worth of shares. Alpine Associates, One Fin Capital Management, and Hourglass Capital 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 One Fin Capital Management allocated the biggest weight to People’s United Financial, Inc. (NASDAQ:PBCT), around 4.32% of its 13F portfolio. Hourglass Capital is also relatively very bullish on the stock, earmarking 1.4 percent of its 13F equity portfolio to PBCT.
Because People’s United Financial, Inc. (NASDAQ:PBCT) has faced bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their positions entirely heading into Q2. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at close to $19.8 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $4.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 9 funds heading into Q2.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as People’s United Financial, Inc. (NASDAQ:PBCT) but similarly valued. We will take a look at Woodward Inc (NASDAQ:WWD), Smartsheet Inc. (NYSE:SMAR), SiteOne Landscape Supply, Inc. (NYSE:SITE), CubeSmart (NYSE:CUBE), Jefferies Financial Group Inc. (NYSE:JEF), PVH Corp (NYSE:PVH), and InVitae Corporation (NYSE:NVTA). All of these stocks’ market caps are closest to PBCT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WWD | 27 | 643051 | 8 |
| SMAR | 39 | 1490070 | -6 |
| SITE | 16 | 67390 | -1 |
| CUBE | 25 | 350765 | 1 |
| JEF | 38 | 700629 | 5 |
| PVH | 34 | 1234659 | -3 |
| NVTA | 34 | 2759303 | -1 |
| Average | 30.4 | 1035124 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.4 hedge funds with bullish positions and the average amount invested in these stocks was $1035 million. That figure was $209 million in PBCT’s case. Smartsheet Inc. (NYSE:SMAR) is the most popular stock in this table. On the other hand SiteOne Landscape Supply, Inc. (NYSE:SITE) is the least popular one with only 16 bullish hedge fund positions. People’s United Financial, Inc. (NASDAQ:PBCT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PBCT is 25.4. 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 negative signal and 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately PBCT wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PBCT investors were disappointed as the stock returned -9.6% since the end of March (through 7/16) 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 most of these stocks already outperformed the market in 2021.
Follow People's United Financial Inc. (NASDAQ:PBCT)
Follow People's United Financial Inc. (NASDAQ:PBCT)
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Disclosure: None. This article was originally published at Insider Monkey.
