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 second quarter. You can find write-ups 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 and analyze what the smart money thinks of Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) based on that data.
Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) was in 18 hedge funds’ portfolios at the end of the second quarter of 2019. PNFP shareholders have witnessed an increase in support from the world’s most elite money managers lately. There were 15 hedge funds in our database with PNFP holdings at the end of the previous quarter. Our calculations also showed that PNFP isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to review the fresh hedge fund action encompassing Pinnacle Financial Partners, Inc. (NASDAQ:PNFP).
What have hedge funds been doing with Pinnacle Financial Partners, Inc. (NASDAQ:PNFP)?
At Q2’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PNFP over the last 16 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, 12th Street Asset Management, managed by Michael O’Keefe, holds the most valuable position in Pinnacle Financial Partners, Inc. (NASDAQ:PNFP). 12th Street Asset Management has a $23.6 million position in the stock, comprising 6.4% of its 13F portfolio. The second most bullish fund manager is Elizabeth Park Capital Management, led by Fred Cummings, holding a $15.1 million position; 6.2% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions include Mark Lee’s Forest Hill Capital, Anton Schutz’s Mendon Capital Advisors and Ken Griffin’s Citadel Investment Group.
Consequently, specific money managers have jumped into Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) headfirst. Laurion Capital Management, managed by Benjamin A. Smith, created the largest position in Pinnacle Financial Partners, Inc. (NASDAQ:PNFP). Laurion Capital Management had $1 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Gelband’s ExodusPoint Capital, Roger Ibbotson’s Zebra Capital Management, and Mike Vranos’s Ellington.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) but similarly valued. These stocks are Tetra Tech, Inc. (NASDAQ:TTEK), Littelfuse, Inc. (NASDAQ:LFUS), Assured Guaranty Ltd. (NYSE:AGO), and Marriott Vacations Worldwide Corporation (NYSE:VAC). This group of stocks’ market valuations resemble PNFP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TTEK | 22 | 101584 | -1 |
| LFUS | 15 | 268202 | 2 |
| AGO | 36 | 613916 | 2 |
| VAC | 27 | 442811 | 1 |
| Average | 25 | 356628 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $357 million. That figure was $79 million in PNFP’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand Littelfuse, Inc. (NASDAQ:LFUS) is the least popular one with only 15 bullish hedge fund positions. Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately PNFP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PNFP investors were disappointed as the stock returned -1% during the third 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 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
