It’s a little-known fact that stock performance is not evenly distributed (i.e. you don’t have a 50/50 chance of picking a market-beating stock). In fact, despite the S&P 500 gaining about 5.2% between November 1, 2014 and October 30, 2015, less than 49% of the stocks in the index beat the market during that time. In contrast, the 30 stocks from the index which were the most popular among the investors that we track returned 9.5% during that time and 63% of them beat the market. This shows that while hedge funds get a lot of flak from the mainstream media for their performance, it can be rewarding to follow their moves using the right sets of data. Even then, there is never a fool proof strategy to generating returns, as even the collective wisdom of top hedge funds gets it wrong some times, as in the case of some of their top picks from the index like Micron and Anadarko. The data though, shows that following the collective wisdom of select hedge funds can be a very wise move overall.
Hedge fund interest in Prudential Public Limited Company (ADR) (NYSE:PUK) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare PUK to other stocks including Honda Motor Co Ltd (ADR) (NYSE:HMC), Ford Motor Company (NYSE:F), and BT Group plc (ADR) (NYSE:BT) to get a better sense of its popularity.
Follow Prudential Plc (NYSE:PUK)
Follow Prudential Plc (NYSE:PUK)
With all of this in mind, we’re going to check out the recent action encompassing Prudential Public Limited Company (ADR) (NYSE:PUK).
How are hedge funds trading Prudential Public Limited Company (ADR) (NYSE:PUK)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Prudential Public Limited Company (ADR) (NYSE:PUK). Fisher Asset Management has a $114.9 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, managed by Jim Simons, which holds a $5.7 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism comprise Robert B. Gillam’s McKinley Capital Management, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.
Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest stake of the 700 funds watched by Insider Monkey, totaling an estimated $9 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dropped its stock, about $0.4 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Prudential Public Limited Company (ADR) (NYSE:PUK) but similarly valued. These stocks are Honda Motor Co Ltd (ADR) (NYSE:HMC), Ford Motor Company (NYSE:F), BT Group plc (ADR) (NYSE:BT), and The Bank of Nova Scotia (USA) (NYSE:BNS). This group of stocks’ market caps are similar to PUK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HMC | 10 | 60915 | 1 |
| F | 38 | 907228 | 2 |
| BT | 11 | 151176 | 1 |
| BNS | 17 | 327227 | 1 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $362 million. That figure was $135 million in PUK’s case. Ford Motor Company (NYSE:F) is the most popular stock in this table. On the other hand Honda Motor Co Ltd (ADR) (NYSE:HMC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Prudential Public Limited Company (ADR) (NYSE:PUK) is even less popular than HMC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
