Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 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 gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Prudential Public Limited Company (ADR) (NYSE:PUK) in this article.
Is Prudential Public Limited Company (ADR) (NYSE:PUK) undervalued? Investors who are in the know are indeed getting more bullish. The number of bullish hedge fund bets improved by 1 recently. There were 8 hedge funds in our database with PUK positions at the end of the previous quarter. 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 Las Vegas Sands Corp. (NYSE:LVS), Kimberly Clark Corp (NYSE:KMB), and Monsanto Company (NYSE:MON) to gather more data points.
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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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Keeping this in mind, we’re going to take a look at the fresh action regarding Prudential Public Limited Company (ADR) (NYSE:PUK).
How are hedge funds trading Prudential Public Limited Company (ADR) (NYSE:PUK)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in PUK heading into this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the number one position in Prudential Public Limited Company (ADR) (NYSE:PUK). Renaissance Technologies has a $8.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $3.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions contain Israel Englander’s Millennium Management, J. Alan Reid, Jr.’s Forward Management and Robert B. Gillam’s McKinley Capital Management. We should note that Forward Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As industrywide interest jumped, some big names have jumped into Prudential Public Limited Company (ADR) (NYSE:PUK) headfirst. Stevens Capital Management, led by Matthew Tewksbury, initiated the biggest position in Prudential Public Limited Company (ADR) (NYSE:PUK). Stevens Capital Management had $0.9 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $0.5 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Prudential Public Limited Company (ADR) (NYSE:PUK) but similarly valued. These stocks are Las Vegas Sands Corp. (NYSE:LVS), Kimberly Clark Corp (NYSE:KMB), Monsanto Company (NYSE:MON), and Express Scripts Holding Company (NASDAQ:ESRX). This group of stocks’ market caps resemble PUK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LVS | 31 | 659604 | 8 |
| KMB | 29 | 1420992 | 7 |
| MON | 77 | 3675899 | -10 |
| ESRX | 52 | 2444668 | 1 |
As you can see these stocks had an average of 47.25 hedge funds with bullish positions and the average amount invested in these stocks was $2050 million. That figure was $20 million in PUK’s case. Monsanto Company (NYSE:MON) is the most popular stock in this table. On the other hand Kimberly Clark Corp (NYSE:KMB) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Prudential Public Limited Company (ADR) (NYSE:PUK) is even less popular than KMB. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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