Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of PerkinElmer, Inc. (NYSE:PKI) based on that data and determine whether they were really smart about the stock.
PerkinElmer, Inc. (NYSE:PKI) shareholders have witnessed an increase in hedge fund interest recently. PerkinElmer, Inc. (NYSE:PKI) was in 30 hedge funds’ portfolios at the end of June. The all time high for this statistics is 31. Our calculations also showed that PKI isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Alec Litowitz of Magnetar Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world 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. Keeping this in mind we’re going to review the latest hedge fund action regarding PerkinElmer, Inc. (NYSE:PKI).
How have hedgies been trading PerkinElmer, Inc. (NYSE:PKI)?
At the end of June, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 43% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PKI over the last 20 quarters. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Select Equity Group, managed by Robert Joseph Caruso, holds the largest position in PerkinElmer, Inc. (NYSE:PKI). Select Equity Group has a $922.4 million position in the stock, comprising 5.3% of its 13F portfolio. The second largest stake is held by Ian Simm of Impax Asset Management, with a $119.7 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Greg Poole’s Echo Street Capital Management, Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Select Equity Group allocated the biggest weight to PerkinElmer, Inc. (NYSE:PKI), around 5.3% of its 13F portfolio. Running Oak Capital is also relatively very bullish on the stock, setting aside 1.91 percent of its 13F equity portfolio to PKI.
As industrywide interest jumped, specific money managers have been driving this bullishness. Renaissance Technologies, created the largest position in PerkinElmer, Inc. (NYSE:PKI). Renaissance Technologies had $29.4 million invested in the company at the end of the quarter. Seth Cogswell’s Running Oak Capital also made a $4.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser’s Magnetar Capital, David Harding’s Winton Capital Management, and Greg Eisner’s Engineers Gate Manager.
Let’s now review 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 Cloudflare, Inc. (NYSE:NET), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), ABIOMED, Inc. (NASDAQ:ABMD), Pool Corporation (NASDAQ:POOL), KB Financial Group, Inc. (NYSE:KB), Alteryx, Inc. (NYSE:AYX), and Gartner Inc (NYSE:IT). 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 |
|---|---|---|---|
| NET | 36 | 456001 | 12 |
| HZNP | 45 | 2955360 | 4 |
| ABMD | 31 | 823991 | 4 |
| POOL | 35 | 492145 | 2 |
| KB | 6 | 36329 | -1 |
| AYX | 48 | 1612975 | 5 |
| IT | 32 | 1302132 | 0 |
| Average | 33.3 | 1096990 | 3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.3 hedge funds with bullish positions and the average amount invested in these stocks was $1097 million. That figure was $1263 million in PKI’s case. Alteryx, Inc. (NYSE:AYX) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 6 bullish hedge fund positions. PerkinElmer, Inc. (NYSE:PKI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PKI is 67.6. 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and still beat the market by 17.6 percentage points. A small number of hedge funds were also right about betting on PKI as the stock returned 20.1% since the end of June (through September 14th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
