Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Pitney Bowes Inc. (NYSE:PBI) changed recently.
Pitney Bowes Inc. (NYSE:PBI) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that PBI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Hollysys Automation Technologies Ltd (NASDAQ:HOLI), Companhia Brasileira de Distrib. (NYSE:CBD), and Snap One Holdings Corp. (NASDAQ:SNPO) to gather more data points.
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. Keeping this in mind we’re going to take a peek at the key hedge fund action surrounding Pitney Bowes Inc. (NYSE:PBI).
Do Hedge Funds Think PBI Is A Good Stock To Buy Now?
At third quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PBI over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Pitney Bowes Inc. (NYSE:PBI), with a stake worth $15.1 million reported as of the end of September. Trailing Royce & Associates was Masters Capital Management, which amassed a stake valued at $14.4 million. D E Shaw, Litespeed Management, and Two Sigma 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 Litespeed Management allocated the biggest weight to Pitney Bowes Inc. (NYSE:PBI), around 12.34% of its 13F portfolio. Nierenberg Investment Management is also relatively very bullish on the stock, setting aside 4.59 percent of its 13F equity portfolio to PBI.
Seeing as Pitney Bowes Inc. (NYSE:PBI) has faced falling interest from hedge fund managers, it’s safe to say that there was a specific group of fund managers that decided to sell off their entire stakes in the third quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the biggest stake of all the hedgies watched by Insider Monkey, totaling about $18.1 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also dumped its stock, about $15.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pitney Bowes Inc. (NYSE:PBI) but similarly valued. We will take a look at Hollysys Automation Technologies Ltd (NASDAQ:HOLI), Companhia Brasileira de Distrib. (NYSE:CBD), Snap One Holdings Corp. (NASDAQ:SNPO), Inhibrx, Inc. (NASDAQ:INBX), PubMatic, Inc. (NASDAQ:PUBM), Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT), and TPI Composites, Inc. (NASDAQ:TPIC). This group of stocks’ market valuations are closest to PBI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HOLI | 18 | 162209 | -1 |
| CBD | 8 | 5741 | -2 |
| SNPO | 10 | 194777 | 10 |
| INBX | 10 | 304765 | -1 |
| PUBM | 15 | 33816 | 5 |
| ARCT | 16 | 153095 | 3 |
| TPIC | 19 | 114700 | -1 |
| Average | 13.7 | 138443 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $106 million in PBI’s case. TPI Composites, Inc. (NASDAQ:TPIC) is the most popular stock in this table. On the other hand Companhia Brasileira de Distrib. (NYSE:CBD) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Pitney Bowes Inc. (NYSE:PBI) is more popular among hedge funds. Our overall hedge fund sentiment score for PBI is 79.6. 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 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately PBI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PBI were disappointed as the stock returned -5.5% since the end of the third quarter (through 12/9) 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 since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
