Hedge Funds Are Piling Into PPD, Inc. (PPD)

In this article we will take a look at whether hedge funds think PPD, Inc. (NASDAQ:PPD) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

PPD, Inc. (NASDAQ:PPD) investors should be aware of an increase in enthusiasm from smart money in recent months. PPD, Inc. (NASDAQ:PPD) was in 37 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PPD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

To most market participants, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at present, We choose to focus on the leaders of this club, approximately 850 funds. It is estimated that this group of investors watch over the lion’s share of the smart money’s total asset base, and by keeping track of their unrivaled stock picks, Insider Monkey has come up with many investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year 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.

Clint Carlson of Carlson Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech 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. With all of this in mind let’s analyze the fresh hedge fund action encompassing PPD, Inc. (NASDAQ:PPD).

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

At the end of the second quarter, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in PPD a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Among these funds, Pentwater Capital Management held the most valuable stake in PPD, Inc. (NASDAQ:PPD), which was worth $563.2 million at the end of the second quarter. On the second spot was Millennium Management which amassed $228.8 million worth of shares. Alpine Associates, Magnetar Capital, and Tudor Investment Corp 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 Pentwater Capital Management allocated the biggest weight to PPD, Inc. (NASDAQ:PPD), around 4.65% of its 13F portfolio. Alpine Associates is also relatively very bullish on the stock, setting aside 4.45 percent of its 13F equity portfolio to PPD.

Now, specific money managers have jumped into PPD, Inc. (NASDAQ:PPD) headfirst. Alpine Associates, managed by Robert Emil Zoellner, initiated the most outsized position in PPD, Inc. (NASDAQ:PPD). Alpine Associates had $162.3 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $115.3 million investment in the stock during the quarter. The following funds were also among the new PPD investors: George Soros’s Soros Fund Management, John Orrico’s Water Island Capital, and Clint Carlson’s Carlson Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as PPD, Inc. (NASDAQ:PPD) but similarly valued. We will take a look at Franklin Resources, Inc. (NYSE:BEN), Quest Diagnostics Incorporated (NYSE:DGX), Eastman Chemical Company (NYSE:EMN), Companhia Paranaense de Energia – COPEL (NYSE:ELP), NortonLifeLock Inc. (NASDAQ:NLOK), Nomura Holdings, Inc. (NYSE:NMR), and Novavax, Inc. (NASDAQ:NVAX). This group of stocks’ market caps resemble PPD’s market cap.

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As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $473 million. That figure was $1911 million in PPD’s case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand Nomura Holdings, Inc. (NYSE:NMR) is the least popular one with only 7 bullish hedge fund positions. PPD, Inc. (NASDAQ:PPD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PPD is 90. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on PPD as the stock returned 1.8% since the end of Q2 (through 10/11) 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.