What Hedge Funds Think About P.A.M. Transportation Services, Inc. (PTSI)

Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30th. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about P.A.M. Transportation Services, Inc. (NASDAQ:PTSI).

Is P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) the right pick for your portfolio? The best stock pickers are becoming less confident. The number of bullish hedge fund positions dropped by three in recent months. PTSI was in four hedge funds’ portfolios at the end of September. There were seven hedge funds in our database with PTSI positions at the end of the previous quarter. At the end of this article we will also compare PTSI to other stocks including Applied Genetic Technologies Corp (NASDAQ:AGTC), Cascade Microtech, Inc. (NASDAQ:CSCD), and Franklin Financial Network Inc (NYSE:FSB) to get a better sense of its popularity.

To most traders, hedge funds are viewed as slow, old financial vehicles of the past. While there are more than 8000 funds in operation today, our researchers look at the crème de la crème of this club, around 700 funds. These hedge fund managers oversee the lion’s share of all hedge funds’ total capital, and by shadowing their inimitable investments, Insider Monkey has brought to light several investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, let’s check out the fresh action surrounding P.A.M. Transportation Services, Inc. (NASDAQ:PTSI).

Hedge fund activity in P.A.M. Transportation Services, Inc. (NASDAQ:PTSI)

At the end of the third quarter, a total of four of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of -43% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund holdings data compiled by Insider Monkey, Jim Simons’s Renaissance Technologies had the biggest position in P.A.M. Transportation Services, Inc. (NASDAQ:PTSI), worth close to $12.2 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish hedge fund manager is AQR Capital Management, managed by Cliff Asness, which held a $1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions comprise Israel Englander’s Millennium Management, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Since P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there were a few fund managers that decided to sell off their full holdings last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the biggest stake of the “upper crust” of funds watched by Insider Monkey, valued at close to $0.4 million in stock. Peter Muller’s fund, PDT Partners, also said goodbye to its stock, about $0.2 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) but similarly valued. These stocks are Applied Genetic Technologies Corp (NASDAQ:AGTC), Cascade Microtech, Inc. (NASDAQ:CSCD), Franklin Financial Network Inc (NYSE:FSB), and DURECT Corporation (NASDAQ:DRRX). This group of stocks’ market valuations are similar to PTSI’s market valuation.

As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure stood at $14 million in PTSI’s case. Applied Genetic Technologies Corp (NASDAQ:AGTC) is the most popular stock in this table with 11 long positions, while Franklin Financial Network Inc (NYSE:FSB) is the least popular one. Compared to these stocks, we can see that hedge funds are not very fond of P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) either. It does not necessarily suggest that PTSI is a bad long investment, and it may be the case that the stock has been under the hedge funds’ radars. In any case, we think that it is better to focus on stocks that enjoy more popularity among hedge funds and Applied Genetic Technologies Corp may be a better alternative to consider.