Peoples Bancorp Inc. (PEBO): Hedge Funds In Wait-and-See Mode

Is Peoples Bancorp Inc. (NASDAQ:PEBO) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Hedge fund interest in Peoples Bancorp Inc. (NASDAQ:PEBO) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that PEBO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 Ryerson Holding Corporation (NYSE:RYI), Liquidity Services, Inc. (NASDAQ:LQDT), and Comtech Telecommunications Corp. (NASDAQ:CMTL) to gather more data points.

In the financial world there are a multitude of metrics stock traders use to size up stocks. Some of the most useful metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce their index-focused peers by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Fred DiSanto of Ancora Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to view the fresh hedge fund action surrounding Peoples Bancorp Inc. (NASDAQ:PEBO).

Do Hedge Funds Think PEBO Is A Good Stock To Buy Now?

At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in PEBO a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in Peoples Bancorp Inc. (NASDAQ:PEBO), which was worth $6.4 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $2.9 million worth of shares. Millennium Management, Two Sigma Advisors, and Ancora Advisors 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 Renaissance Technologies allocated the biggest weight to Peoples Bancorp Inc. (NASDAQ:PEBO), around 0.01% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, earmarking 0.0011 percent of its 13F equity portfolio to PEBO.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Arrowstreet Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).

Let’s also examine hedge fund activity in other stocks similar to Peoples Bancorp Inc. (NASDAQ:PEBO). We will take a look at Ryerson Holding Corporation (NYSE:RYI), Liquidity Services, Inc. (NASDAQ:LQDT), Comtech Telecommunications Corp. (NASDAQ:CMTL), Thermon Group Holdings, Inc. (NYSE:THR), CuriosityStream Inc. (NASDAQ:CURI), Uranium Energy Corp. (NYSE:UEC), and Kimball Electronics Inc (NASDAQ:KE). This group of stocks’ market valuations match PEBO’s market valuation.

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As you can see these stocks had an average of 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $10 million in PEBO’s case. Kimball Electronics Inc (NASDAQ:KE) is the most popular stock in this table. On the other hand Uranium Energy Corp. (NYSE:UEC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Peoples Bancorp Inc. (NASDAQ:PEBO) is even less popular than UEC. Our overall hedge fund sentiment score for PEBO is 18.6. 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. Hedge funds dodged a bullet by taking a bearish stance towards PEBO. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market again by 6.1 percentage points. Unfortunately PEBO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); PEBO investors were disappointed as the stock returned -10.4% since the end of the first quarter (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.