Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze PTC Inc (NASDAQ:PTC) from the perspective of those elite funds.
PTC Inc (NASDAQ:PTC) was in 30 hedge funds’ portfolios at the end of the third quarter of 2016. PTC has seen a decrease in hedge fund interest of late. There were 32 hedge funds in our database with PTC positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Sally Beauty Holdings, Inc. (NYSE:SBH), Scotts Miracle-Gro Co (NYSE:SMG), and White Mountains Insurance Group Ltd (NYSE:WTM) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading PTC Inc (NASDAQ:PTC)?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 6% from the previous quarter, with hedge fund ownership falling to a yearly low, though hedgies still own nearly 20% of the company’s shares. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ricky Sandler’s Eminence Capital has the biggest position in PTC Inc (NASDAQ:PTC), worth close to $107.8 million, comprising 1.8% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $90.7 million position. Other peers that are bullish encompass Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, David Stemerman’s Conatus Capital Management, and Israel Englander’s Millennium Management.
Since PTC Inc (NASDAQ:PTC) has experienced declining sentiment from hedge fund managers, it’s safe to say that there were a few fund managers who sold off their positions entirely in the third quarter. Intriguingly, Alex Sacerdote’s Whale Rock Capital said goodbye to the biggest position of the 700 funds tracked by Insider Monkey, worth close to $11.3 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also dumped its stock, about $9 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to PTC Inc (NASDAQ:PTC). These stocks are Sally Beauty Holdings, Inc. (NYSE:SBH), Scotts Miracle-Gro Co (NYSE:SMG), White Mountains Insurance Group Ltd (NYSE:WTM), and Amtrust Financial Services, Inc. (NASDAQ:AFSI). This group of stocks’ market valuations match PTC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBH | 12 | 115791 | -5 |
| SMG | 20 | 226331 | -4 |
| WTM | 12 | 182441 | 1 |
| AFSI | 22 | 210663 | 0 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $988 million in PTC’s case. Amtrust Financial Services, Inc. (NASDAQ:AFSI) is the most popular stock in this table. On the other hand Sally Beauty Holdings, Inc. (NYSE:SBH) is the least popular one with only 12 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
