Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is PerkinElmer, Inc. (NYSE:PKI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is PKI a good stock to buy? PerkinElmer, Inc. (NYSE:PKI) was in 36 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. PKI has seen an increase in activity from the world’s largest hedge funds recently. There were 30 hedge funds in our database with PKI holdings at the end of June. Our calculations also showed that PKI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ian Wace of Marshall Wace
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. With all of this in mind let’s take a glance at the recent hedge fund action surrounding PerkinElmer, Inc. (NYSE:PKI).
Do Hedge Funds Think PKI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PKI over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Select Equity Group held the most valuable stake in PerkinElmer, Inc. (NYSE:PKI), which was worth $1168.1 million at the end of the third quarter. On the second spot was Impax Asset Management which amassed $142.8 million worth of shares. Echo Street Capital Management, Renaissance Technologies, and Marshall Wace LLP 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 Select Equity Group allocated the biggest weight to PerkinElmer, Inc. (NYSE:PKI), around 5.74% of its 13F portfolio. Integral Health Asset Management is also relatively very bullish on the stock, dishing out 4.22 percent of its 13F equity portfolio to PKI.
Now, key hedge funds were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, created the largest position in PerkinElmer, Inc. (NYSE:PKI). Balyasny Asset Management had $18.8 million invested in the company at the end of the quarter. Christopher James’s Partner Fund Management also initiated a $18.5 million position during the quarter. The following funds were also among the new PKI investors: Principal Global Investors’s Columbus Circle Investors, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Mario Gabelli’s GAMCO Investors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as PerkinElmer, Inc. (NYSE:PKI) but similarly valued. We will take a look at Tyler Technologies, Inc. (NYSE:TYL), Nomura Holdings, Inc. (NYSE:NMR), Royal Caribbean Group (NYSE:RCL), Sun Communities Inc (NYSE:SUI), Extra Space Storage, Inc. (NYSE:EXR), BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), and C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW). This group of stocks’ market valuations resemble PKI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TYL | 31 | 520210 | -5 |
| NMR | 6 | 18282 | 1 |
| RCL | 30 | 418133 | -1 |
| SUI | 31 | 350701 | 1 |
| EXR | 27 | 280182 | 0 |
| BMRN | 44 | 1572770 | -1 |
| CHRW | 22 | 531478 | -6 |
| Average | 27.3 | 527394 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $527 million. That figure was $1751 million in PKI’s case. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is the most popular stock in this table. On the other hand Nomura Holdings, Inc. (NYSE:NMR) is the least popular one with only 6 bullish hedge fund positions. PerkinElmer, Inc. (NYSE:PKI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PKI is 79.5. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on PKI as the stock returned 13.8% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
