Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Points International Ltd (NASDAQ:PCOM) based on that data and determine whether they were really smart about the stock.
Points International Ltd (NASDAQ:PCOM) was in 10 hedge funds’ portfolios at the end of March. PCOM has experienced an increase in support from the world’s most elite money managers recently. There were 7 hedge funds in our database with PCOM holdings at the end of the previous quarter. Our calculations also showed that PCOM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s go over the recent hedge fund action encompassing Points International Ltd (NASDAQ:PCOM).
How are hedge funds trading Points International Ltd (NASDAQ:PCOM)?
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 43% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in PCOM over the last 18 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
The largest stake in Points International Ltd (NASDAQ:PCOM) was held by Renaissance Technologies, which reported holding $6.8 million worth of stock at the end of September. It was followed by Harspring Capital Management with a $5.1 million position. Other investors bullish on the company included G2 Investment Partners Management, Galibier Capital Management, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Harspring Capital Management allocated the biggest weight to Points International Ltd (NASDAQ:PCOM), around 2.86% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, dishing out 0.9 percent of its 13F equity portfolio to PCOM.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. G2 Investment Partners Management, managed by Josh Goldberg, initiated the most outsized position in Points International Ltd (NASDAQ:PCOM). G2 Investment Partners Management had $2.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Points International Ltd (NASDAQ:PCOM) but similarly valued. We will take a look at Oconee Federal Financial (NASDAQ:OFED), Calyxt, Inc. (NASDAQ:CLXT), BioSig Technologies, Inc. (NASDAQ:BSGM), and iBio, Inc. (NYSE:IBIO). This group of stocks’ market values match PCOM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OFED | 1 | 332 | 0 |
| CLXT | 4 | 2098 | 0 |
| BSGM | 1 | 75 | -1 |
| IBIO | 3 | 176 | 1 |
| Average | 2.25 | 670 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.25 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $18 million in PCOM’s case. Calyxt, Inc. (NASDAQ:CLXT) is the most popular stock in this table. On the other hand Oconee Federal Financial (NASDAQ:OFED) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Points International Ltd (NASDAQ:PCOM) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. Unfortunately PCOM wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on PCOM were disappointed as the stock returned 10.7% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
