Hedge Funds Are Piling Into PFSweb, Inc. (PFSW)

In this article we will analyze whether PFSweb, Inc. (NASDAQ:PFSW) 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 PFSweb, Inc. (NASDAQ:PFSW) going to take off soon? Hedge funds were becoming more confident. The number of long hedge fund positions moved up by 4 lately. PFSweb, Inc. (NASDAQ:PFSW) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 12. Our calculations also showed that PFSW isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 6 hedge funds in our database with PFSW positions at the end of the first quarter.

If you’d ask most market participants, hedge funds are assumed to be slow, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, We hone in on the aristocrats of this group, approximately 850 funds. These hedge fund managers administer the majority of the smart money’s total capital, and by monitoring their inimitable equity investments, Insider Monkey has formulated numerous investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Louis Bacon Moore of Moore Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a gander at the recent hedge fund action regarding PFSweb, Inc. (NASDAQ:PFSW).

Do Hedge Funds Think PFSW Is A Good Stock To Buy Now?

At Q2’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PFSW over the last 24 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.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, George McCabe’s Portolan Capital Management has the most valuable position in PFSweb, Inc. (NASDAQ:PFSW), worth close to $10.8 million, amounting to 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is Thomas Ellis and Todd Hammer of North Run Capital, with a $7.8 million position; the fund has 5.3% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass Renaissance Technologies, Noah Levy and Eugene Dozortsev’s Newtyn Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position North Run Capital allocated the biggest weight to PFSweb, Inc. (NASDAQ:PFSW), around 5.3% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, earmarking 0.78 percent of its 13F equity portfolio to PFSW.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Newtyn Management, managed by Noah Levy and Eugene Dozortsev, created the biggest position in PFSweb, Inc. (NASDAQ:PFSW). Newtyn Management had $1.1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.7 million investment in the stock during the quarter. The other funds with brand new PFSW positions are Louis Bacon’s Moore Global Investments, Ken Griffin’s Citadel Investment Group, and Mark Broach’s Manatuck Hill Partners.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as PFSweb, Inc. (NASDAQ:PFSW) but similarly valued. These stocks are Tarena International Inc (NASDAQ:TEDU), Acme United Corporation (NYSE:ACU), Flux Power Holdings, Inc. (NASDAQ:FLUX), Calithera Biosciences Inc (NASDAQ:CALA), Longeveron Inc. (NASDAQ:LGVN), American Resources Corporation (NASDAQ:AREC), and Viridian Therapeutics, Inc. (NASDAQ:VRDN). This group of stocks’ market caps resemble PFSW’s market cap.

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As you can see these stocks had an average of 5.7 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $28 million in PFSW’s case. Calithera Biosciences Inc (NASDAQ:CALA) is the most popular stock in this table. On the other hand Flux Power Holdings, Inc. (NASDAQ:FLUX) is the least popular one with only 2 bullish hedge fund positions. PFSweb, Inc. (NASDAQ:PFSW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PFSW is 74. 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. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on PFSW as the stock returned 73% since the end of Q2 (through 9/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.

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