Hedge Funds Are Piling Into Pilgrim’s Pride Corporation (PPC)

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Pilgrim’s Pride Corporation (NASDAQ:PPC).

Pilgrim’s Pride Corporation (NASDAQ:PPC) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic is 28. PPC has experienced an increase in hedge fund sentiment of late. There were 18 hedge funds in our database with PPC positions at the end of the second quarter. Our calculations also showed that PPC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 review the latest hedge fund action encompassing Pilgrim’s Pride Corporation (NASDAQ:PPC).

Jeffrey Tannenbaum of Fir Tree

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

At third quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 39% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in PPC a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

The largest stake in Pilgrim’s Pride Corporation (NASDAQ:PPC) was held by TOMS Capital, which reported holding $58.8 million worth of stock at the end of September. It was followed by TOMS Capital with a $57.2 million position. Other investors bullish on the company included TIG Advisors, Arrowstreet Capital, and Fir Tree. In terms of the portfolio weights assigned to each position TOMS Capital allocated the biggest weight to Pilgrim’s Pride Corporation (NASDAQ:PPC), around 3.38% of its 13F portfolio. TOMS Capital is also relatively very bullish on the stock, earmarking 3.29 percent of its 13F equity portfolio to PPC.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. TOMS Capital, managed by Benjamin Pass, initiated the most outsized call position in Pilgrim’s Pride Corporation (NASDAQ:PPC). TOMS Capital had $58.8 million invested in the company at the end of the quarter. Benjamin Pass’s TOMS Capital also initiated a $57.2 million position during the quarter. The other funds with new positions in the stock are Carl Tiedemann and Michael Tiedemann’s TIG Advisors, Jeffrey Tannenbaum’s Fir Tree, and Joseph Samuels’s Islet Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Pilgrim’s Pride Corporation (NASDAQ:PPC) but similarly valued. We will take a look at Old Republic International Corporation (NYSE:ORI), Starwood Property Trust, Inc. (NYSE:STWD), PLDT Inc. (NYSE:PHI), Choice Hotels International, Inc. (NYSE:CHH), Synaptics Incorporated (NASDAQ:SYNA), Oshkosh Corporation (NYSE:OSK), and BridgeBio Pharma, Inc. (NASDAQ:BBIO). This group of stocks’ market values match PPC’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.4 hedge funds with bullish positions and the average amount invested in these stocks was $522 million. That figure was $255 million in PPC’s case. Oshkosh Corporation (NYSE:OSK) is the most popular stock in this table. On the other hand PLDT Inc. (NYSE:PHI) is the least popular one with only 5 bullish hedge fund positions. Pilgrim’s Pride Corporation (NASDAQ:PPC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PPC is 75.2. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately PPC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PPC were disappointed as the stock returned -3.2% since the end of September (through 12/9) 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.