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Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Park National Corporation (NYSE:PRK) changed recently.
Park National Corporation (NYSE:PRK) investors should be aware of an increase in activity from the world's largest hedge funds of late. Park National Corporation (NYSE:PRK) was in 5 hedge funds' portfolios at the end of March. The all time high for this statistic is 12. There were 4 hedge funds in our database with PRK positions at the end of the fourth quarter. Our calculations also showed that PRK isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Fred DiSanto of Ancora Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. Keeping this in mind we're going to take a peek at the recent hedge fund action encompassing Park National Corporation (NYSE:PRK).
Do Hedge Funds Think PRK Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in PRK over the last 23 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Park National Corporation (NYSE:PRK), which was worth $3.5 million at the end of the fourth quarter. On the second spot was Balyasny Asset Management which amassed $0.8 million worth of shares. Schonfeld Strategic Advisors, D E Shaw, and Ancora Advisors 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 Schonfeld Strategic Advisors allocated the biggest weight to Park National Corporation (NYSE:PRK), around 0.01% of its 13F portfolio. Balyasny Asset Management is also relatively very bullish on the stock, designating 0.0039 percent of its 13F equity portfolio to PRK.
As one would reasonably expect, some big names were leading the bulls' herd. D E Shaw, managed by D. E. Shaw, established the most valuable position in Park National Corporation (NYSE:PRK). D E Shaw had $0.2 million invested in the company at the end of the quarter.
Let's now review hedge fund activity in other stocks similar to Park National Corporation (NYSE:PRK). These stocks are FB Financial Corporation (NYSE:FBK), Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), MediaAlpha, Inc. (NYSE:MAX), EnLink Midstream LLC (NYSE:ENLC), Avanos Medical (NYSE:AVNS), ModivCare Inc. (NASDAQ:MODV), and Healthcare Services Group, Inc. (NASDAQ:HCSG). This group of stocks' market values are similar to PRK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FBK,10,82989,1 MDRX,24,282702,2 MAX,15,33320,7 ENLC,11,42185,3 AVNS,13,232180,-1 MODV,14,410878,-3 HCSG,19,148475,1 Average,15.1,176104,1.4 [/table]
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 $176 million. That figure was $5 million in PRK's case. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) is the most popular stock in this table. On the other hand FB Financial Corporation (NYSE:FBK) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Park National Corporation (NYSE:PRK) is even less popular than FBK. Our overall hedge fund sentiment score for PRK is 18.5. 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. Hedge funds dodged a bullet by taking a bearish stance towards PRK. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market again by 6.1 percentage points. Unfortunately PRK wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); PRK investors were disappointed as the stock returned -7.6% since the end of the first quarter (through 6/18) 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.
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Disclosure: None. This article was originally published at Insider Monkey.