Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 of 2018 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETFs by nearly 10 percentage points during the first 11 months of 2019. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Pilgrim’s Pride Corporation (NASDAQ:PPC) from the perspective of those elite funds. Pilgrim’s Pride is a poultry farmer operating in some of the biggest chicken producing states in US. It is a top 5 holding in First Trust Consumer Staples AlphaDEX Fund (NYSE:FXG).
Pilgrim’s Pride Corporation (NASDAQ:PPC) has seen an increase in support from the world’s most elite money managers of late. Our calculations also showed that PPC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s go over the latest hedge fund action regarding Pilgrim’s Pride Corporation (NASDAQ:PPC).
How have hedgies been trading Pilgrim’s Pride Corporation (NASDAQ:PPC)?
Heading into the fourth quarter of 2019, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 26% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PPC over the last 17 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Pilgrim’s Pride Corporation (NASDAQ:PPC) was held by AQR Capital Management, which reported holding $81 million worth of stock at the end of September. It was followed by GLG Partners with a $60.9 million position. Other investors bullish on the company included D E Shaw, Citadel Investment Group, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Passport Capital allocated the biggest weight to Pilgrim’s Pride Corporation (NASDAQ:PPC), around 12.32% of its portfolio. Harvest Capital Strategies is also relatively very bullish on the stock, earmarking 5 percent of its 13F equity portfolio to PPC.
As aggregate interest increased, specific money managers have jumped into Pilgrim’s Pride Corporation (NASDAQ:PPC) headfirst. Passport Capital, managed by John Burbank, assembled the largest position in Pilgrim’s Pride Corporation (NASDAQ:PPC). Passport Capital had $8 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also made a $5.4 million investment in the stock during the quarter. The other funds with brand new PPC positions are David Harding’s Winton Capital Management, Jonathan Barrett and Paul Segal’s Luminus Management, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pilgrim’s Pride Corporation (NASDAQ:PPC) but similarly valued. These stocks are ICON Public Limited Company (NASDAQ:ICLR), Euronet Worldwide, Inc. (NASDAQ:EEFT), Invesco Ltd. (NYSE:IVZ), and Canopy Growth Corporation (NYSE:CGC). All of these stocks’ market caps are closest to PPC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICLR | 20 | 613069 | 1 |
| EEFT | 35 | 322755 | 2 |
| IVZ | 24 | 198236 | 4 |
| CGC | 8 | 23222 | 4 |
| Average | 21.75 | 289321 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $289 million. That figure was $264 million in PPC’s case. Euronet Worldwide, Inc. (NASDAQ:EEFT) is the most popular stock in this table. On the other hand Canopy Growth Corporation (NYSE:CGC) is the least popular one with only 8 bullish hedge fund positions. Pilgrim’s Pride Corporation (NASDAQ:PPC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately PPC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PPC were disappointed as the stock returned -1.7% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
