At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Pool Corporation (NASDAQ:POOL).
Pool Corporation (NASDAQ:POOL) has seen an increase in activity from the world's largest hedge funds lately. Our calculations also showed that POOL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are dozens of formulas stock traders have at their disposal to value publicly traded companies. Some of the most useful formulas are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can beat their index-focused peers by a healthy margin (see the details here).
[caption id="attachment_30668" align="aligncenter" width="399"] Richard Chilton of Chilton Investment Company[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to check out the new hedge fund action surrounding Pool Corporation (NASDAQ:POOL).
How have hedgies been trading Pool Corporation (NASDAQ:POOL)?
At Q1's end, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards POOL over the last 18 quarters. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Pool Corporation (NASDAQ:POOL), with a stake worth $74.9 million reported as of the end of September. Trailing Fisher Asset Management was Impax Asset Management, which amassed a stake valued at $66.8 million. Chilton Investment Company, Echo Street Capital Management, and Select Equity Group 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 Aubrey Capital Management allocated the biggest weight to Pool Corporation (NASDAQ:POOL), around 2.28% of its 13F portfolio. Lyon Street Capital is also relatively very bullish on the stock, setting aside 2.03 percent of its 13F equity portfolio to POOL.
Now, specific money managers were breaking ground themselves. Select Equity Group, managed by Robert Joseph Caruso, established the most outsized position in Pool Corporation (NASDAQ:POOL). Select Equity Group had $25.9 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $7.3 million position during the quarter. The other funds with new positions in the stock are Alexander Mitchell's Scopus Asset Management, Renaissance Technologies, and Clint Carlson's Carlson Capital.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Pool Corporation (NASDAQ:POOL) but similarly valued. These stocks are Camden Property Trust (NYSE:CPT), Expedia Group Inc (NASDAQ:EXPE), Crown Holdings, Inc. (NYSE:CCK), and Zscaler, Inc. (NASDAQ:ZS). This group of stocks' market valuations match POOL's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CPT,32,361736,1 EXPE,41,1550595,-18 CCK,56,1217305,-2 ZS,27,274887,9 Average,39,851131,-2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $851 million. That figure was $362 million in POOL's case. Crown Holdings, Inc. (NYSE:CCK) is the most popular stock in this table. On the other hand Zscaler, Inc. (NASDAQ:ZS) is the least popular one with only 27 bullish hedge fund positions. Pool Corporation (NASDAQ:POOL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on POOL as the stock returned 37.1% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.