At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards PJT Partners Inc (NYSE:PJT).
Is PJT Partners Inc (NYSE:PJT) a buy here? Money managers are taking a bullish view. The number of long hedge fund positions improved by 2 recently. Our calculations also showed that PJT 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.
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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. Keeping this in mind we’re going to take a peek at the latest hedge fund action regarding PJT Partners Inc (NYSE:PJT).
How are hedge funds trading PJT Partners Inc (NYSE:PJT)?
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 10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PJT over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, MHR Fund Management held the most valuable stake in PJT Partners Inc (NYSE:PJT), which was worth $38.2 million at the end of the third quarter. On the second spot was Tudor Investment Corp which amassed $6.5 million worth of shares. Citadel Investment Group, GAMCO Investors, and Schonfeld Strategic Advisors 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 Corsair Capital LLC allocated the biggest weight to PJT Partners Inc (NYSE:PJT), around 100% of its 13F portfolio. MHR Fund Management is also relatively very bullish on the stock, dishing out 5.8 percent of its 13F equity portfolio to PJT.
As one would reasonably expect, some big names were breaking ground themselves. Hudson Bay Capital Management, managed by Sander Gerber, assembled the most outsized position in PJT Partners Inc (NYSE:PJT). Hudson Bay Capital Management had $4.3 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $2.5 million position during the quarter. The following funds were also among the new PJT investors: Parvinder Thiara’s Athanor Capital and Greg Eisner’s Engineers Gate Manager.
Let’s now review hedge fund activity in other stocks similar to PJT Partners Inc (NYSE:PJT). We will take a look at Helmerich & Payne, Inc. (NYSE:HP), Hancock Whitney Corporation (NASDAQ:HWC), Atlantic Union Bankshares Corporation (NASDAQ:AUB), and Cimarex Energy Co (NYSE:XEC). This group of stocks’ market values resemble PJT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HP | 27 | 114660 | -6 |
| HWC | 20 | 40474 | 4 |
| AUB | 10 | 14509 | 2 |
| XEC | 35 | 398770 | 2 |
| Average | 23 | 142103 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $88 million in PJT’s case. Cimarex Energy Co (NYSE:XEC) is the most popular stock in this table. On the other hand Atlantic Union Bankshares Corporation (NASDAQ:AUB) is the least popular one with only 10 bullish hedge fund positions. PJT Partners Inc (NYSE:PJT) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on PJT, though not to the same extent, as the stock returned 27.2% during the second quarter and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
