Hedge Funds Are Piling Into PotlatchDeltic Corporation (PCH)

In this article we will check out the progression of hedge fund sentiment towards PotlatchDeltic Corporation (NASDAQ:PCH) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

PotlatchDeltic Corporation (NASDAQ:PCH) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. PotlatchDeltic Corporation (NASDAQ:PCH) was in 28 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PCH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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Jeffrey Ubben, Founder of ValueAct Capital and Inclusive Capital Partners

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

At second quarter’s end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in PCH a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the most valuable position in PotlatchDeltic Corporation (NASDAQ:PCH). Renaissance Technologies has a $29.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Inclusive Capital, managed by Jeff Ubben, which holds a $10.7 million position; 1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish contain Cliff Asness’s AQR Capital Management, John Brennan’s Sirios Capital Management and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Intrepid Capital Management allocated the biggest weight to PotlatchDeltic Corporation (NASDAQ:PCH), around 1.18% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 1.12 percent of its 13F equity portfolio to PCH.

As industrywide interest jumped, some big names have been driving this bullishness. Inclusive Capital, managed by Jeff Ubben, established the largest position in PotlatchDeltic Corporation (NASDAQ:PCH). Inclusive Capital had $10.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $4.3 million investment in the stock during the quarter. The other funds with brand new PCH positions are Nick Thakore’s Diametric Capital, Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital), and Renee Yao’s Neo Ivy Capital.

Let’s now review hedge fund activity in other stocks similar to PotlatchDeltic Corporation (NASDAQ:PCH). We will take a look at PagerDuty, Inc. (NYSE:PD), Meritage Homes Corp (NYSE:MTH), Diodes Incorporated (NASDAQ:DIOD), M.D.C. Holdings, Inc. (NYSE:MDC), ExlService Holdings, Inc. (NASDAQ:EXLS), Bed Bath & Beyond Inc. (NASDAQ:BBBY), and Hilton Grand Vacations Inc. (NYSE:HGV). This group of stocks’ market values resemble PCH’s market value.

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As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $369 million. That figure was $113 million in PCH’s case. Hilton Grand Vacations Inc. (NYSE:HGV) is the most popular stock in this table. On the other hand ExlService Holdings, Inc. (NASDAQ:EXLS) is the least popular one with only 15 bullish hedge fund positions. PotlatchDeltic Corporation (NASDAQ:PCH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PCH is 71.2. 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. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on PCH as the stock returned 4.8% since the end of Q2 (through 10/15) 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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