“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards PBF Energy Inc (NYSE:PBF) and see how it was affected.
Is PBF Energy Inc (NYSE:PBF) a buy here? The best stock pickers are in a bullish mood. The number of long hedge fund positions advanced by 4 lately. Our calculations also showed that pbf isn’t among the 30 most popular stocks among hedge funds. PBF was in 29 hedge funds’ portfolios at the end of September. There were 25 hedge funds in our database with PBF holdings at the end of the previous quarter.
In the financial world there are plenty of indicators investors can use to assess their stock investments. A couple of the less known indicators are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can trounce the market by a very impressive amount (see the details here).
We’re going to check out the recent hedge fund action regarding PBF Energy Inc (NYSE:PBF).
Hedge fund activity in PBF Energy Inc (NYSE:PBF)
Heading into the fourth quarter of 2018, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in PBF heading into this year. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of PBF Energy Inc (NYSE:PBF), with a stake worth $155.3 million reported as of the end of September. Trailing AQR Capital Management was Suvretta Capital Management, which amassed a stake valued at $72.2 million. Arrowstreet Capital, Sirios Capital Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, key money managers have jumped into PBF Energy Inc (NYSE:PBF) headfirst. Sirios Capital Management, managed by John Brennan, initiated the most valuable position in PBF Energy Inc (NYSE:PBF). Sirios Capital Management had $38 million invested in the company at the end of the quarter. Rob Citrone’s Discovery Capital Management also made a $9.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Guy Shahar’s DSAM Partners, Eric Chen’s Antipodean Advisors, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s go over hedge fund activity in other stocks similar to PBF Energy Inc (NYSE:PBF). These stocks are Ceridian HCM Holding Inc. (NYSE:CDAY), DCP Midstream LP (NYSE:DCP), GrafTech International Ltd. (NYSE:EAF), and Gates Industrial Corporation plc (NYSE:GTES). This group of stocks’ market caps are closest to PBF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CDAY | 18 | 344935 | -2 |
| DCP | 5 | 17689 | 0 |
| EAF | 31 | 350715 | 12 |
| GTES | 9 | 21656 | 0 |
| Average | 15.75 | 183749 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $479 million in PBF’s case. GrafTech International Ltd. (NYSE:EAF) is the most popular stock in this table. On the other hand DCP Midstream LP (NYSE:DCP) is the least popular one with only 5 bullish hedge fund positions. PBF Energy Inc (NYSE:PBF) 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 EAF might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
