How do we determine whether PotlatchDeltic Corporation (NASDAQ:PCH) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
PotlatchDeltic Corporation (NASDAQ:PCH) has experienced an increase in support from the world's most elite money managers recently. PCH was in 17 hedge funds' portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with PCH holdings at the end of the previous quarter. Our calculations also showed that PCH isn't among the 30 most popular stocks among hedge funds.
To most shareholders, hedge funds are assumed to be unimportant, outdated investment tools of years past. While there are more than 8000 funds trading today, Our researchers hone in on the elite of this group, approximately 750 funds. Most estimates calculate that this group of people administer the majority of the hedge fund industry's total capital, and by paying attention to their best investments, Insider Monkey has discovered a number of investment strategies that have historically outstripped the broader indices. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's take a glance at the latest hedge fund action surrounding PotlatchDeltic Corporation (NASDAQ:PCH).
What have hedge funds been doing with PotlatchDeltic Corporation (NASDAQ:PCH)?
At Q1's end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in PCH a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in PotlatchDeltic Corporation (NASDAQ:PCH) was held by Southeastern Asset Management, which reported holding $174.9 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $100.2 million position. Other investors bullish on the company included Citadel Investment Group, Royce & Associates, and Ancora Advisors.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Intrepid Capital Management, managed by Mark Travis, created the most valuable position in PotlatchDeltic Corporation (NASDAQ:PCH). Intrepid Capital Management had $6.3 million invested in the company at the end of the quarter. Minhua Zhang's Weld Capital Management also initiated a $0.7 million position during the quarter. The other funds with brand new PCH positions are Benjamin A. Smith's Laurion Capital Management, D. E. Shaw's D E Shaw, and Mario Gabelli's GAMCO Investors.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as PotlatchDeltic Corporation (NASDAQ:PCH) but similarly valued. We will take a look at Globant SA (NYSE:GLOB), BlackLine, Inc. (NASDAQ:BL), Element Solutions Inc (NYSE:ESI), and YETI Holdings, Inc. (NYSE:YETI). All of these stocks' market caps are similar to PCH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLOB,20,65839,5 BL,20,107437,7 ESI,32,675276,11 YETI,14,49603,4 Average,21.5,224539,6.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $225 million. That figure was $336 million in PCH's case. Element Solutions Inc (NYSE:ESI) is the most popular stock in this table. On the other hand YETI Holdings, Inc. (NYSE:YETI) is the least popular one with only 14 bullish hedge fund positions. PotlatchDeltic Corporation (NASDAQ:PCH) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on PCH, though not to the same extent, as the stock returned 4.5% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.