A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell's pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of PACCAR Inc (NASDAQ:PCAR) during the quarter.
PACCAR Inc (NASDAQ:PCAR) investors should be aware of an increase in activity from the world's largest hedge funds recently. Our calculations also showed that pcar isn't among the 30 most popular stocks among hedge funds.
To most stock holders, hedge funds are perceived as unimportant, old financial tools of years past. While there are more than 8000 funds in operation at present, Our experts choose to focus on the elite of this group, about 750 funds. These hedge fund managers have their hands on the lion's share of all hedge funds' total asset base, and by following their finest picks, Insider Monkey has spotted a few investment strategies that have historically beaten the market. Insider Monkey's flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% 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 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
We're going to take a look at the new hedge fund action encompassing PACCAR Inc (NASDAQ:PCAR).
What have hedge funds been doing with PACCAR Inc (NASDAQ:PCAR)?
Heading into the second quarter of 2019, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the fourth quarter of 2018. On the other hand, there were a total of 25 hedge funds with a bullish position in PCAR a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GAMCO Investors was the largest shareholder of PACCAR Inc (NASDAQ:PCAR), with a stake worth $30.6 million reported as of the end of March. Trailing GAMCO Investors was Two Sigma Advisors, which amassed a stake valued at $14.5 million. D E Shaw, AQR Capital Management, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, key hedge funds were breaking ground themselves. Element Capital Management, managed by Jeffrey Talpins, created the biggest position in PACCAR Inc (NASDAQ:PCAR). Element Capital Management had $3.7 million invested in the company at the end of the quarter. Anand Parekh's Alyeska Investment Group also initiated a $1.1 million position during the quarter. The other funds with brand new PCAR positions are Matthew Hulsizer's PEAK6 Capital Management, Peter Algert and Kevin Coldiron's Algert Coldiron Investors, and Matthew Tewksbury's Stevens Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to PACCAR Inc (NASDAQ:PCAR). These stocks are Waste Connections, Inc. (NYSE:WCN), Discover Financial Services (NYSE:DFS), Fiat Chrysler Automobiles NV (NYSE:FCAU), and Sprint Corporation (NYSE:S). This group of stocks' market caps resemble PCAR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WCN,26,545837,-2 DFS,36,742031,-1 FCAU,27,2246774,-7 S,24,618801,0 Average,28.25,1038361,-2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.25 hedge funds with bullish positions and the average amount invested in these stocks was $1038 million. That figure was $95 million in PCAR's case. Discover Financial Services (NYSE:DFS) is the most popular stock in this table. On the other hand Sprint Corporation (NYSE:S) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks PACCAR Inc (NASDAQ:PCAR) is even less popular than S. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on PCAR, though not to the same extent, as the stock returned 0.3% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.