Reputable billionaire investors such as Jim Simons, Cliff Asness and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Is PS Business Parks Inc (NYSE:PSB) a bargain? Investors who are in the know are getting more bullish. The number of bullish hedge fund bets moved up by 2 recently. Our calculations also showed that PSB isn’t among the 30 most popular stocks among hedge funds (view the video below). PSB was in 14 hedge funds’ portfolios at the end of June. There were 12 hedge funds in our database with PSB holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are assumed to be worthless, outdated investment tools of years past. While there are more than 8000 funds with their doors open at present, We hone in on the top tier of this club, around 750 funds. It is estimated that this group of investors orchestrate most of the smart money’s total asset base, and by watching their highest performing equity investments, Insider Monkey has figured out various investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
We’re going to analyze the fresh hedge fund action regarding PS Business Parks Inc (NYSE:PSB).
How have hedgies been trading PS Business Parks Inc (NYSE:PSB)?
Heading into the third quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in PSB a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Winton Capital Management was the largest shareholder of PS Business Parks Inc (NYSE:PSB), with a stake worth $34.2 million reported as of the end of March. Trailing Winton Capital Management was Millennium Management, which amassed a stake valued at $10.1 million. Two Sigma Advisors, Renaissance Technologies, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the biggest position in PS Business Parks Inc (NYSE:PSB). Millennium Management had $10.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $1.6 million position during the quarter. The other funds with brand new PSB positions are Michael Gelband’s ExodusPoint Capital, Joel Greenblatt’s Gotham Asset Management, and Steve Cohen’s Point72 Asset Management.
Let’s also examine hedge fund activity in other stocks similar to PS Business Parks Inc (NYSE:PSB). These stocks are Integra Lifesciences Holdings Corp (NASDAQ:IART), National Fuel Gas Company (NYSE:NFG), Western Alliance Bancorporation (NYSE:WAL), and MAXIMUS, Inc. (NYSE:MMS). This group of stocks’ market caps are closest to PSB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IART | 21 | 165189 | 2 |
| NFG | 22 | 241410 | 6 |
| WAL | 27 | 294906 | -1 |
| MMS | 22 | 218927 | 2 |
| Average | 23 | 230108 | 2.25 |
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 $230 million. That figure was $62 million in PSB’s case. Western Alliance Bancorporation (NYSE:WAL) is the most popular stock in this table. On the other hand Integra Lifesciences Holdings Corp (NASDAQ:IART) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks PS Business Parks Inc (NYSE:PSB) is even less popular than IART. Hedge funds clearly dropped the ball on PSB as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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. A small number of hedge funds were also right about betting on PSB as the stock returned 8.6% during the third quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
