Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about PTC Inc (NASDAQ:PTC) in this article.
PTC Inc (NASDAQ:PTC) investors should pay attention to a decrease in hedge fund sentiment in recent months. PTC Inc (NASDAQ:PTC) was in 31 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 46. There were 33 hedge funds in our database with PTC positions at the end of the first quarter. Our calculations also showed that PTC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David S. Winter of 40 North Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a peek at the fresh hedge fund action regarding PTC Inc (NASDAQ:PTC).
Do Hedge Funds Think PTC Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the first quarter of 2020. By comparison, 40 hedge funds held shares or bullish call options in PTC a year ago. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Among these funds, Impax Asset Management held the most valuable stake in PTC Inc (NASDAQ:PTC), which was worth $487.2 million at the end of the second quarter. On the second spot was 40 North Management which amassed $451 million worth of shares. Alkeon Capital Management, Praesidium Investment Management Company, and Select Equity Group 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 Praesidium Investment Management Company allocated the biggest weight to PTC Inc (NASDAQ:PTC), around 13.07% of its 13F portfolio. StackLine Partners is also relatively very bullish on the stock, setting aside 10.44 percent of its 13F equity portfolio to PTC.
Since PTC Inc (NASDAQ:PTC) has experienced a decline in interest from the smart money, logic holds that there was a specific group of hedge funds that elected to cut their positions entirely in the second quarter. Intriguingly, Mark Coe’s Intrinsic Edge Capital cut the largest position of the 750 funds tracked by Insider Monkey, totaling an estimated $6.6 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dropped its stock, about $4.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds in the second quarter.
Let’s check out hedge fund activity in other stocks similar to PTC Inc (NASDAQ:PTC). We will take a look at The Carlyle Group Inc (NASDAQ:CG), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Elanco Animal Health Incorporated (NYSE:ELAN), Wix.Com Ltd (NASDAQ:WIX), ON Semiconductor Corporation (NASDAQ:ON), Markel Corporation (NYSE:MKL), and TAL Education Group (NYSE:TAL). This group of stocks’ market caps are similar to PTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CG | 21 | 601725 | -5 |
| BIP | 16 | 71356 | 4 |
| ELAN | 42 | 1996818 | 0 |
| WIX | 35 | 1381019 | -5 |
| ON | 44 | 1021403 | 3 |
| MKL | 33 | 709075 | 3 |
| TAL | 27 | 606671 | -11 |
| Average | 31.1 | 912581 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $913 million. That figure was $1959 million in PTC’s case. ON Semiconductor Corporation (NASDAQ:ON) is the most popular stock in this table. On the other hand Brookfield Infrastructure Partners L.P. (NYSE:BIP) is the least popular one with only 16 bullish hedge fund positions. PTC Inc (NASDAQ:PTC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PTC is 50. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and surpassed the market again by 4.5 percentage points. Unfortunately PTC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PTC investors were disappointed as the stock returned -12.6% since the end of June (through 10/15) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
