The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Pilgrim’s Pride Corporation (NASDAQ:PPC) from the perspective of those elite funds.
Is Pilgrim’s Pride Corporation (NASDAQ:PPC) ready to rally soon? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions inched up by 1 in recent months. PPC was in 21 hedge funds’ portfolios at the end of the third quarter of 2016. There were 20 hedge funds in our database with PPC holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Align Technology, Inc. (NASDAQ:ALGN), CIT Group Inc. (NYSE:CIT), and Lamar Advertising Co (NASDAQ:LAMR) to gather more data points.
Follow Pilgrims Pride Corp (NASDAQ:PPC)
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How are hedge funds trading Pilgrim’s Pride Corporation (NASDAQ:PPC)?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a 5% uptick from one quarter earlier. Hedge fund ownership of the stock has slowly rebounded after a huge Q1 drop. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, managed by Jim Simons, holds the number one position in Pilgrim’s Pride Corporation (NASDAQ:PPC). Renaissance Technologies has a $56.3 million position in the stock. The second most bullish fund manager is AQR Capital Management, managed by Cliff Asness, which holds a $54.2 million position. Other members of the smart money with similar optimism consist of D E Shaw, founded by David E. Shaw, as well as Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and John Overdeck and David Siegel’s Two Sigma Advisors.
Now, key hedge funds have jumped into Pilgrim’s Pride Corporation (NASDAQ:PPC) headfirst. BlueCrest Capital Mgmt., managed by Michael Platt and William Reeves, created the most outsized position in Pilgrim’s Pride Corporation (NASDAQ:PPC). BlueCrest Capital Mgmt. had $1.7 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $1.1 million position during the quarter. The other funds with brand new PPC positions are George Hall’s Clinton Group, Ray Carroll’s Breton Hill Capital, and Paul Tudor Jones’ Tudor Investment Corp.
Let’s now take a look at hedge fund activity in other stocks similar to Pilgrim’s Pride Corporation (NASDAQ:PPC). These stocks are Align Technology, Inc. (NASDAQ:ALGN), CIT Group Inc. (NYSE:CIT), Lamar Advertising Co (NASDAQ:LAMR), and Signet Jewelers Ltd. (NYSE:SIG). This group of stocks’ market caps are similar to PPC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALGN | 37 | 589442 | 11 |
| CIT | 28 | 1312081 | -2 |
| LAMR | 22 | 258634 | 1 |
| SIG | 39 | 2132429 | -5 |
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.07 billion. That figure was $236 million in PPC’s case. Signet Jewelers Ltd. (NYSE:SIG) is the most popular stock in this table. On the other hand Lamar Advertising Co (NASDAQ:LAMR) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Pilgrim’s Pride Corporation (NASDAQ:PPC) is even less popular than LAMR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None
