The SEC requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have compiled an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Packaging Corp Of America (NYSE:PKG) based on those filings.
Is Packaging Corp Of America (NYSE:PKG) a good investment now? The smart money is in a bullish mood. The number of bullish hedge fund positions went up by 1 lately. At the end of this article we will also compare PKG to other stocks including Leucadia National Corp. (NYSE:LUK), IDEX Corporation (NYSE:IEX), and Taro Pharmaceutical Industries Ltd. (NYSE:TARO) to get a better sense of its popularity.
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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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Hedge fund activity in Packaging Corp Of America (NYSE:PKG)
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a 5% rise from the previous quarter. Hedge fund ownership has remained within a narrow range over the past year, with between 19 and 22 hedge funds holding the stock throughout that time. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Cliff Asness’ AQR Capital Management has the number one position in Packaging Corp Of America (NYSE:PKG), worth close to $57.5 million. Sitting at the No. 2 spot is Gotham Asset Management, managed by Joel Greenblatt, which holds a $27.2 million position. Other members of the smart money that hold long positions consist of Michael O’Keefe’s 12th Street Asset Management, Ken Griffin’s Citadel Investment Group and Benjamin A. Smith’s Laurion Capital Management.
Consequently, specific money managers were breaking ground themselves. Laurion Capital Management initiated the biggest call position in Packaging Corp Of America (NYSE:PKG). Laurion Capital Management had $7.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $4.2 million investment in the stock during the quarter. The other funds with brand new PKG positions are Citadel Investment Group, D E Shaw, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Packaging Corp Of America (NYSE:PKG) but similarly valued. We will take a look at Leucadia National Corp. (NYSE:LUK), IDEX Corporation (NYSE:IEX), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), and Lennox International Inc. (NYSE:LII). This group of stocks’ market values match PKG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LUK | 29 | 800246 | 5 |
| IEX | 16 | 184770 | 2 |
| TARO | 14 | 107519 | 2 |
| LII | 16 | 100308 | 1 |
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $298 million. That figure was $154 million in PKG’s case. Leucadia National Corp. (NYSE:LUK) is the most popular stock in this table. On the other hand Taro Pharmaceutical Industries Ltd. (NYSE:TARO) is the least popular one with only 14 bullish hedge fund positions. Packaging Corp Of America (NYSE:PKG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LUK might be a better candidate to consider for a long position.
Disclosure: None
