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 PBF Energy Inc (NYSE:PBF) based on that data.
Is PBF Energy Inc (NYSE:PBF) worth your attention right now? Prominent investors are turning less bullish. The number of long hedge fund positions retreated by 10 lately. Our calculations also showed that PBF 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). PBF was in 22 hedge funds’ portfolios at the end of the first quarter of 2020. There were 32 hedge funds in our database with PBF positions at the end of the previous quarter.
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.
Cliff Asness of AQR Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to go over the recent hedge fund action surrounding PBF Energy Inc (NYSE:PBF).
How have hedgies been trading PBF Energy Inc (NYSE:PBF)?
Heading into the second quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the fourth quarter of 2019. On the other hand, there were a total of 22 hedge funds with a bullish position in PBF a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the most valuable position in PBF Energy Inc (NYSE:PBF). D E Shaw has a $19.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which holds a $11.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain Cliff Asness’s AQR Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Solas Capital Management allocated the biggest weight to PBF Energy Inc (NYSE:PBF), around 1.24% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, earmarking 0.84 percent of its 13F equity portfolio to PBF.
Since PBF Energy Inc (NYSE:PBF) has faced bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few fund managers who sold off their positions entirely last quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management dumped the largest position of all the hedgies followed by Insider Monkey, totaling an estimated $17.3 million in stock. Jonathan Barrett and Paul Segal’s fund, Luminus Management, also said goodbye to its stock, about $6.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 10 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to PBF Energy Inc (NYSE:PBF). These stocks are DCP Midstream LP (NYSE:DCP), Cango Inc. (NYSE:CANG), 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), and Sunnova Energy International Inc. (NYSE:NOVA). This group of stocks’ market caps are closest to PBF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DCP | 4 | 7421 | -2 |
| CANG | 1 | 212 | 0 |
| FLWS | 19 | 60482 | 4 |
| NOVA | 9 | 49870 | 0 |
| Average | 8.25 | 29496 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $71 million in PBF’s case. 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) is the most popular stock in this table. On the other hand Cango Inc. (NYSE:CANG) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks PBF Energy Inc (NYSE:PBF) 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 returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on PBF as the stock returned 89.3% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
