Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Childrens Place Inc (NASDAQ:PLCE) has experienced a decrease in enthusiasm from smart money of late. At the end of this article we will also compare PLCE to other stocks including G&K Services Inc (NASDAQ:GK), Columbia Pipeline Partners LP (NYSE:CPPL), and Northwest Bancshares, Inc. (NASDAQ:NWBI) to get a better sense of its popularity.
Follow Childrens Place Inc. (NASDAQ:PLCE)
Follow Childrens Place Inc. (NASDAQ:PLCE)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to analyze the latest action regarding Childrens Place Inc (NASDAQ:PLCE).
Hedge fund activity in Childrens Place Inc (NASDAQ:PLCE)
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 24% from the second quarter of 2016. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chuck Royce’s Royce & Associates has the biggest position in Childrens Place Inc (NASDAQ:PLCE), worth close to $80.8 million, comprising 0.5% of its total 13F portfolio. The second most bullish fund manager is Dmitry Balyasny of Balyasny Asset Management, with a $24.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism include Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, David Costen Haley’s HBK Investments and David Keidan’s Buckingham Capital Management.
Because Childrens Place Inc (NASDAQ:PLCE) has experienced bearish sentiment from the smart money, logic holds that there is a sect of hedgies who sold off their full holdings last quarter. Intriguingly, Anand Parekh’s Alyeska Investment Group said goodbye to the largest position of all the hedgies followed by Insider Monkey, totaling about $6.2 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dumped about $5.6 million worth of PLCE shares. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 7 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Childrens Place Inc (NASDAQ:PLCE) but similarly valued. These stocks are G&K Services Inc (NASDAQ:GK), Columbia Pipeline Partners LP (NYSE:CPPL), Northwest Bancshares, Inc. (NASDAQ:NWBI), and FBL Financial Group (NYSE:FFG). All of these stocks’ market caps match PLCE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GK | 11 | 169989 | 0 |
| CPPL | 9 | 72703 | -1 |
| NWBI | 8 | 36251 | 1 |
| FFG | 6 | 5826 | 1 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $216 million in PLCE’s case. G&K Services Inc (NASDAQ:GK) is the most popular stock in this table. On the other hand FBL Financial Group (NYSE:FFG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Childrens Place Inc (NASDAQ:PLCE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: none.
