Is PNC Financial Services Group Inc. (NYSE:PNC) 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.
PNC Financial Services Group Inc. (NYSE:PNC) investors should be aware of an increase in enthusiasm from smart money recently. PNC Financial Services Group Inc. (NYSE:PNC) was in 41 hedge funds’ portfolios at the end of September. The all time high for this statistic is 52. There were 38 hedge funds in our database with PNC positions at the end of the second quarter. Our calculations also showed that PNC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Mario Gabelli of GAMCO Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s go over the fresh hedge fund action regarding PNC Financial Services Group Inc. (NYSE:PNC).
Do Hedge Funds Think PNC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PNC over the last 25 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in PNC Financial Services Group Inc. (NYSE:PNC) was held by Holocene Advisors, which reported holding $122.2 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $86.1 million position. Other investors bullish on the company included GAMCO Investors, Balyasny Asset Management, and D E Shaw. In terms of the portfolio weights assigned to each position Strycker View Capital allocated the biggest weight to PNC Financial Services Group Inc. (NYSE:PNC), around 4.15% of its 13F portfolio. Hi-Line Capital Management is also relatively very bullish on the stock, dishing out 2.99 percent of its 13F equity portfolio to PNC.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into PNC Financial Services Group Inc. (NYSE:PNC) headfirst. Gillson Capital, managed by Daniel Johnson, initiated the most valuable position in PNC Financial Services Group Inc. (NYSE:PNC). Gillson Capital had $21.9 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $7.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Sahm Adrangi’s Kerrisdale Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as PNC Financial Services Group Inc. (NYSE:PNC) but similarly valued. We will take a look at Equinor ASA (NYSE:EQNR), Canadian National Railway Company (NYSE:CNI), Mondelez International Inc (NASDAQ:MDLZ), British American Tobacco plc (NYSE:BTI), Enbridge Inc (NYSE:ENB), Lam Research Corporation (NASDAQ:LRCX), and Micron Technology, Inc. (NASDAQ:MU). This group of stocks’ market caps resemble PNC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EQNR | 11 | 163324 | 0 |
| CNI | 42 | 7392349 | 2 |
| MDLZ | 46 | 1922079 | -7 |
| BTI | 9 | 724383 | -3 |
| ENB | 24 | 211478 | 5 |
| LRCX | 47 | 3519311 | -11 |
| MU | 63 | 3841359 | -24 |
| Average | 34.6 | 2539183 | -5.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.6 hedge funds with bullish positions and the average amount invested in these stocks was $2539 million. That figure was $506 million in PNC’s case. Micron Technology, Inc. (NASDAQ:MU) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 9 bullish hedge fund positions. PNC Financial Services Group Inc. (NYSE:PNC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PNC is 61.3. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately PNC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PNC were disappointed as the stock returned 1.3% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
