Where Do Hedge Funds Stand On PureCycle Technologies, Inc. (PCT)?

In this article we will analyze whether PureCycle Technologies, Inc. (NASDAQ:PCT) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

PureCycle Technologies, Inc. (NASDAQ:PCT) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 21. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. PCT investors should be aware of an increase in support from the world’s most elite money managers lately. There were 21 hedge funds in our database with PCT holdings at the end of March. Our calculations also showed that PCT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the eyes of most shareholders, hedge funds are perceived as worthless, old financial tools of years past. While there are greater than 8000 funds with their doors open at the moment, We hone in on the top tier of this club, about 850 funds. These money managers have their hands on the lion’s share of the hedge fund industry’s total asset base, and by shadowing their unrivaled picks, Insider Monkey has discovered various investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Bart Baum of Ionic Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a glance at the recent hedge fund action encompassing PureCycle Technologies, Inc. (NASDAQ:PCT).

Do Hedge Funds Think PCT Is A Good Stock To Buy Now?

At second quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PCT over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Sylebra Capital Management held the most valuable stake in PureCycle Technologies, Inc. (NASDAQ:PCT), which was worth $410.2 million at the end of the second quarter. On the second spot was Samlyn Capital which amassed $82.2 million worth of shares. Moore Global Investments, Encompass Capital Advisors, and Harvard Management Co 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 Sylebra Capital Management allocated the biggest weight to PureCycle Technologies, Inc. (NASDAQ:PCT), around 10.17% of its 13F portfolio. Encompass Capital Advisors is also relatively very bullish on the stock, designating 1.97 percent of its 13F equity portfolio to PCT.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Moore Global Investments, managed by Louis Bacon, initiated the most outsized position in PureCycle Technologies, Inc. (NASDAQ:PCT). Moore Global Investments had $31.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $9.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Avellone’s Cartenna Capital, Bart Baum’s Ionic Capital Management, and Shashin Shah’s Think Investments.

Let’s go over hedge fund activity in other stocks similar to PureCycle Technologies, Inc. (NASDAQ:PCT). We will take a look at Butterfly Network, Inc. (NYSE:BFLY), Columbia Banking System Inc (NASDAQ:COLB), Domtar Corporation (NYSE:UFS), SPX Corporation (NYSE:SPXC), Vivint Smart Home, Inc. (NYSE:VVNT), SPX FLOW, Inc. (NYSE:FLOW), and Axos Financial, Inc. (NYSE:AX). This group of stocks’ market valuations resemble PCT’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $638 million in PCT’s case. Domtar Corporation (NYSE:UFS) is the most popular stock in this table. On the other hand Vivint Smart Home, Inc. (NYSE:VVNT) is the least popular one with only 5 bullish hedge fund positions. PureCycle Technologies, Inc. (NASDAQ:PCT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PCT is 71.4. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 1.6 percentage points. Unfortunately PCT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PCT were disappointed as the stock returned -38.5% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.

Suggested Articles:

• 10 Biggest Phone Companies In The World
• 10 Best SPACs to Buy According to David Einhorn’s Greenlight Capital
• 20 largest european companies by market cap

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