Were Expert Investors Right About The PNC Financial Services Group Inc. (PNC)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought The PNC Financial Services Group Inc. (NYSE:PNC) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

The PNC Financial Services Group Inc. (NYSE:PNC) was in 41 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 52. PNC has experienced an increase in support from the world’s most elite money managers of late. 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).

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 let’s take a look at the recent hedge fund action surrounding The PNC Financial Services Group Inc. (NYSE:PNC).

Sahm Adrangi of Kerrisdale Capital

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 bullish on this stock, a change of 8% from the previous quarter. On the other hand, there were a total of 37 hedge funds with a bullish position in PNC a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Among these funds, Holocene Advisors held the most valuable stake in The PNC Financial Services Group Inc. (NYSE:PNC), which was worth $122.2 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $86.1 million worth of shares. GAMCO Investors, Balyasny Asset Management, and D E Shaw 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 Strycker View Capital allocated the biggest weight to The 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, designating 2.99 percent of its 13F equity portfolio to PNC.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Gillson Capital, managed by Daniel Johnson, initiated the most valuable position in The 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 initiated a $7.8 million position 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 also examine hedge fund activity in other stocks similar to The PNC Financial Services Group Inc. (NYSE:PNC). These stocks are 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 values are similar to PNC’s market value.

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. The 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on PNC as the stock returned 6.5% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.