The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Prosperity Bancshares, Inc. (NYSE:PB).
Prosperity Bancshares, Inc. (NYSE:PB) was in 21 hedge funds’ portfolios at the end of March. The all time high for this statistic is 27. PB shareholders have witnessed an increase in enthusiasm from smart money recently. There were 16 hedge funds in our database with PB positions at the end of the fourth quarter. Our calculations also showed that PB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (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
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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 let’s view the key hedge fund action surrounding Prosperity Bancshares, Inc. (NYSE:PB).
Do Hedge Funds Think PB Is A Good Stock To Buy Now?
At first quarter’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 31% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in PB a year ago. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Prosperity Bancshares, Inc. (NYSE:PB), with a stake worth $20.5 million reported as of the end of March. Trailing Fisher Asset Management was AQR Capital Management, which amassed a stake valued at $13.3 million. GLG Partners, Renaissance Technologies, and Third Avenue Management 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 Third Avenue Management allocated the biggest weight to Prosperity Bancshares, Inc. (NYSE:PB), around 1.07% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, designating 0.62 percent of its 13F equity portfolio to PB.
Consequently, some big names were breaking ground themselves. Renaissance Technologies, created the most outsized position in Prosperity Bancshares, Inc. (NYSE:PB). Renaissance Technologies had $8.4 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also initiated a $7.3 million position during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Paul Tudor Jones’s Tudor Investment Corp, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Prosperity Bancshares, Inc. (NYSE:PB) but similarly valued. These stocks are MasTec, Inc. (NYSE:MTZ), Mattel, Inc. (NASDAQ:MAT), Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), Ascendis Pharma A/S (NASDAQ:ASND), TopBuild Corp (NYSE:BLD), Lumentum Holdings Inc (NASDAQ:LITE), and Coty Inc (NYSE:COTY). This group of stocks’ market valuations are similar to PB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTZ | 36 | 334673 | 4 |
| MAT | 25 | 872671 | 0 |
| AVAL | 5 | 9921 | 1 |
| ASND | 28 | 2078115 | -3 |
| BLD | 18 | 103995 | -1 |
| LITE | 31 | 329570 | -8 |
| COTY | 25 | 262735 | 3 |
| Average | 24 | 570240 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $570 million. That figure was $97 million in PB’s case. MasTec, Inc. (NYSE:MTZ) is the most popular stock in this table. On the other hand Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is the least popular one with only 5 bullish hedge fund positions. Prosperity Bancshares, Inc. (NYSE:PB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PB is 59.1. 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 negative signal and 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately PB wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PB investors were disappointed as the stock returned -6.7% since the end of March (through 7/16) 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 in 2021.
Follow Prosperity Bancshares Inc (NYSE:PB)
Follow Prosperity Bancshares Inc (NYSE:PB)
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Disclosure: None. This article was originally published at Insider Monkey.
