The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Prudential Financial Inc (NYSE:PRU) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Prudential Financial Inc (NYSE:PRU) a buy, sell, or hold? Investors who are in the know were taking a bullish view. The number of long hedge fund bets moved up by 5 lately. Prudential Financial Inc (NYSE:PRU) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 39. Our calculations also showed that PRU isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 28 hedge funds in our database with PRU positions at the end of the second quarter.
Dmitry Balyasny of Balyasny Asset Management
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 we’re going to take a glance at the latest hedge fund action encompassing Prudential Financial Inc (NYSE:PRU).
Do Hedge Funds Think PRU Is A Good Stock To Buy Now?
At Q3’s end, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. By comparison, 34 hedge funds held shares or bullish call options in PRU a year ago. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, Arrowstreet Capital was the largest shareholder of Prudential Financial Inc (NYSE:PRU), with a stake worth $164.1 million reported as of the end of September. Trailing Arrowstreet Capital was Citadel Investment Group, which amassed a stake valued at $51.7 million. AQR Capital Management, Adage Capital Management, and Mountain Road 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 Mountain Road Advisors allocated the biggest weight to Prudential Financial Inc (NYSE:PRU), around 9.37% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, earmarking 3.23 percent of its 13F equity portfolio to PRU.
As industrywide interest jumped, some big names were breaking ground themselves. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), initiated the most outsized position in Prudential Financial Inc (NYSE:PRU). Schonfeld Strategic Advisors had $28.2 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $13.8 million position during the quarter. The other funds with brand new PRU positions are Jinghua Yan’s TwinBeech Capital, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, and Renee Yao’s Neo Ivy Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Prudential Financial Inc (NYSE:PRU) but similarly valued. We will take a look at Koninklijke Philips NV (NYSE:PHG), Paychex, Inc. (NASDAQ:PAYX), Electronic Arts Inc. (NASDAQ:EA), Constellation Brands, Inc. (NYSE:STZ), Sempra Energy (NYSE:SRE), Aptiv PLC (NYSE:APTV), and Baxter International Inc. (NYSE:BAX). This group of stocks’ market values are similar to PRU’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PHG | 11 | 79466 | 1 |
| PAYX | 34 | 1115089 | 5 |
| EA | 53 | 1097032 | -3 |
| STZ | 53 | 1719109 | 3 |
| SRE | 23 | 287269 | -5 |
| APTV | 44 | 1757047 | 4 |
| BAX | 42 | 3485785 | -4 |
| Average | 37.1 | 1362971 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.1 hedge funds with bullish positions and the average amount invested in these stocks was $1363 million. That figure was $460 million in PRU’s case. Electronic Arts Inc. (NASDAQ:EA) is the most popular stock in this table. On the other hand Koninklijke Philips NV (NYSE:PHG) is the least popular one with only 11 bullish hedge fund positions. Prudential Financial Inc (NYSE:PRU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PRU is 61.6. 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. 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately PRU wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PRU investors were disappointed as the stock returned -1.7% 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 most of these stocks already outperformed the market in 2021.
Follow Prudential Financial Inc (NYSE:PRU)
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Disclosure: None. This article was originally published at Insider Monkey.
