At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not PagSeguro Digital Ltd. (NYSE:PAGS) makes for a good investment right now.
PagSeguro Digital Ltd. (NYSE:PAGS) was in 41 hedge funds’ portfolios at the end of September. The all time high for this statistic is 48. PAGS has seen an increase in enthusiasm from smart money in recent months. There were 40 hedge funds in our database with PAGS positions at the end of the second quarter. Our calculations also showed that PAGS 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 we’re going to review the latest hedge fund action regarding PagSeguro Digital Ltd. (NYSE:PAGS).
Do Hedge Funds Think PAGS Is A Good Stock To Buy Now?
At the end of September, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in PAGS over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in PagSeguro Digital Ltd. (NYSE:PAGS) was held by Sylebra Capital Management, which reported holding $490.4 million worth of stock at the end of September. It was followed by Melvin Capital Management with a $362 million position. Other investors bullish on the company included Melvin Capital Management, Samlyn Capital, and Palestra Capital Management. In terms of the portfolio weights assigned to each position Tekne Capital Management allocated the biggest weight to PagSeguro Digital Ltd. (NYSE:PAGS), around 27.33% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, earmarking 11.04 percent of its 13F equity portfolio to PAGS.
With a general bullishness amongst the heavyweights, specific money managers have jumped into PagSeguro Digital Ltd. (NYSE:PAGS) headfirst. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, created the most valuable position in PagSeguro Digital Ltd. (NYSE:PAGS). LMR Partners had $24.1 million invested in the company at the end of the quarter. Ricky Sandler’s Eminence Capital also initiated a $22.4 million position during the quarter. The other funds with new positions in the stock are Cyrus de Weck’s Portsea Asset Management, Anand Parekh’s Alyeska Investment Group, and Josh Donfeld and David Rogers’s Castle Hook Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as PagSeguro Digital Ltd. (NYSE:PAGS) but similarly valued. We will take a look at Continental Resources, Inc. (NYSE:CLR), Wheaton Precious Metals Corp. (NYSE:WPM), Boston Properties, Inc. (NYSE:BXP), ASE Technology Holding Co., Ltd. (NYSE:ASX), Carlyle Group Inc (NASDAQ:CG), Ceridian HCM Holding Inc. (NYSE:CDAY), and Celanese Corporation (NYSE:CE). This group of stocks’ market values resemble PAGS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLR | 24 | 166253 | 1 |
| WPM | 27 | 347520 | 1 |
| BXP | 21 | 1471101 | 2 |
| ASX | 10 | 271536 | 3 |
| CG | 34 | 1401572 | 13 |
| CDAY | 20 | 1798355 | -5 |
| CE | 26 | 735190 | -11 |
| Average | 23.1 | 884504 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $885 million. That figure was $2447 million in PAGS’s case. Carlyle Group Inc (NASDAQ:CG) is the most popular stock in this table. On the other hand ASE Technology Holding Co., Ltd. (NYSE:ASX) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks PagSeguro Digital Ltd. (NYSE:PAGS) is more popular among hedge funds. Our overall hedge fund sentiment score for PAGS is 81.6. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately PAGS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PAGS were disappointed as the stock returned -50.6% since the end of the third quarter (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 since 2019.
Follow Pagseguro Digital Ltd. (NYSE:PAGS)
Follow Pagseguro Digital Ltd. (NYSE:PAGS)
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Disclosure: None. This article was originally published at Insider Monkey.
