Is Pier 1 Imports, Inc. (NYSE:PIR) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Pier 1 Imports, Inc. shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds’ portfolios at the end of the third quarter of 2015. 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 FARO Technologies, Inc. (NASDAQ:FARO), Altra Holdings, Inc. (NASDAQ:AIMC), and CTS Corporation (NYSE:CTS) to gather more data points.
Follow Pier 1 Imports (U.s.) Inc. (NYSE:PIR)
Follow Pier 1 Imports (U.s.) Inc. (NYSE:PIR)
At the moment there are a large number of methods stock market investors put to use to size up publicly traded companies. A pair of the best methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can trounce the market by a healthy margin (see the details here).
With all of this in mind, we’re going to take a look at the new action encompassing Pier 1 Imports, Inc. (NYSE:PIR).
How have hedgies been trading Pier 1 Imports, Inc. (NYSE:PIR)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Point72 Asset Management, managed by Steve Cohen, holds the largest position in Pier 1 Imports, Inc. (NYSE:PIR) worth an estimated $11.4 million and comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which holds a $7.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism comprise Lee Munder’s Lee Munder Capital Group, Ken Griffin’s Citadel Investment Group and Andy Redleaf’s Whitebox Advisors.
When analyzing the holdings of top hedge funds, Insider Monkey has identified a certain “tier” of fund managers that slashed their entire stakes Pier 1 Imports, Inc. (NYSE:PIR) during the third quarter. Intriguingly, Glenn J. Krevlin’s Glenhill Advisors dumped the largest position of all the hedgies watched by Insider Monkey, valued at an estimated $49 million. Bill Miller’s fund, Legg Mason Capital Management, also dropped its entire holding, about $6.7 million worth of PIR shares. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Pier 1 Imports, Inc. (NYSE:PIR). We will take a look at FARO Technologies, Inc. (NASDAQ:FARO), Altra Holdings, Inc. (NASDAQ:AIMC), CTS Corporation (NYSE:CTS), and Bojangles Inc (NASDAQ:BOJA). This group of stocks’ market values match PIR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FARO | 7 | 25745 | 0 |
| AIMC | 7 | 20354 | 0 |
| CTS | 8 | 73333 | -1 |
| BOJA | 13 | 71765 | 4 |
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 $48 million. That figure was $47 million in PIR’s case, a slightly bad sign. Bojangles Inc (NASDAQ:BOJA) is the most popular stock in this table, while FARO Technologies, Inc. (NASDAQ:FARO) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Pier 1 Imports, Inc. (NYSE:PIR) is clearly the start. 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.
