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You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros and Seth Klarman hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Park National Corporation (NYSEAMEX:PRK) shareholders have witnessed a decrease in support from the world's most elite money managers recently. Our calculations also showed that PRK isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's review the fresh hedge fund action surrounding Park National Corporation (NYSEAMEX:PRK).
How have hedgies been trading Park National Corporation (NYSEAMEX:PRK)?
Heading into the first quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -42% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PRK over the last 14 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Park National Corporation (NYSEAMEX:PRK) was held by Renaissance Technologies, which reported holding $9.3 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $1 million position. Other investors bullish on the company included Blue Mountain Capital, AQR Capital Management, and Holocene Advisors.
Seeing as Park National Corporation (NYSEAMEX:PRK) has faced falling interest from the entirety of the hedge funds we track, we can see that there were a few hedge funds that slashed their entire stakes heading into Q3. Interestingly, Israel Englander's Millennium Management said goodbye to the largest stake of the 700 funds tracked by Insider Monkey, valued at close to $2.7 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also sold off its stock, about $2.3 million worth. These transactions are important to note, as total hedge fund interest dropped by 5 funds heading into Q3.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Park National Corporation (NYSEAMEX:PRK) but similarly valued. We will take a look at QEP Resources Inc (NYSE:QEP), Chesapeake Utilities Corporation (NYSE:CPK), Revlon Inc (NYSE:REV), and Ebix Inc (NASDAQ:EBIX). 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 QEP,25,219271,3 CPK,10,34548,1 REV,26,180187,0 EBIX,18,133327,2 Average,19.75,141833,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $13 million in PRK's case. Revlon Inc (NYSE:REV) is the most popular stock in this table. On the other hand Chesapeake Utilities Corporation (NYSE:CPK) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Park National Corporation (NYSEAMEX:PRK) is even less popular than CPK. Hedge funds dodged a bullet by taking a bearish stance towards PRK. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately PRK wasn't nearly as popular as these 15 stock (hedge fund sentiment was very bearish); PRK investors were disappointed as the stock returned 11.1% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
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