In this article we will take a look at whether hedge funds think PJT Partners Inc (NYSE:PJT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is PJT Partners Inc (NYSE:PJT) the right investment to pursue these days? Prominent investors were in a pessimistic mood. The number of long hedge fund positions were trimmed by 3 in recent months. PJT Partners Inc (NYSE:PJT) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistic is 22. Our calculations also showed that PJT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 22 hedge funds in our database with PJT holdings at the end of March.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Paul Tudor Jones of Tudor Investment Corp
With all of this in mind we’re going to check out the recent hedge fund action surrounding PJT Partners Inc (NYSE:PJT).
Do Hedge Funds Think PJT Is A Good Stock To Buy Now?
At second quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in PJT a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in PJT Partners Inc (NYSE:PJT), which was worth $14.3 million at the end of the second quarter. On the second spot was Tudor Investment Corp which amassed $12.8 million worth of shares. Millennium Management, Two Sigma Advisors, and GAMCO Investors 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 Prospector Partners allocated the biggest weight to PJT Partners Inc (NYSE:PJT), around 0.59% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.34 percent of its 13F equity portfolio to PJT.
Seeing as PJT Partners Inc (NYSE:PJT) has experienced a decline in interest from hedge fund managers, we can see that there exists a select few hedgies who sold off their entire stakes by the end of the second quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest position of the 750 funds followed by Insider Monkey, totaling close to $12.9 million in stock, and Renaissance Technologies was right behind this move, as the fund sold off about $4.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds by the end of the second quarter.
Let’s go over hedge fund activity in other stocks similar to PJT Partners Inc (NYSE:PJT). We will take a look at Desktop Metal, Inc. (NYSE:DM), Trinity Industries, Inc. (NYSE:TRN), Energizer Holdings, Inc. (NYSE:ENR), American States Water Co (NYSE:AWR), Sprouts Farmers Market Inc (NASDAQ:SFM), Verint Systems Inc. (NASDAQ:VRNT), and NanoString Technologies Inc (NASDAQ:NSTG). All of these stocks’ market caps resemble PJT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DM | 27 | 177707 | 7 |
| TRN | 20 | 636585 | -8 |
| ENR | 17 | 209102 | -5 |
| AWR | 14 | 47916 | 0 |
| SFM | 25 | 245919 | 4 |
| VRNT | 30 | 629961 | 4 |
| NSTG | 25 | 773889 | 0 |
| Average | 22.6 | 388726 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.6 hedge funds with bullish positions and the average amount invested in these stocks was $389 million. That figure was $79 million in PJT’s case. Verint Systems Inc. (NASDAQ:VRNT) is the most popular stock in this table. On the other hand American States Water Co (NYSE:AWR) is the least popular one with only 14 bullish hedge fund positions. PJT Partners Inc (NYSE:PJT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PJT is 43.5. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on PJT as the stock returned 28.3% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
Follow Pjt Partners Inc. (NYSE:PJT)
Follow Pjt Partners Inc. (NYSE:PJT)
Suggested Articles:
- 15 Largest Beer Companies In The World
- Billionaire Lee Ainslie’s Top 10 Stock Picks
- 15 Largest Distribution Companies In The World
Disclosure: None. This article was originally published at Insider Monkey.
