Is Petmed Express Inc (NASDAQ:PETS) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Is Petmed Express Inc (NASDAQ:PETS) a cheap investment now? Prominent investors are reducing their bets on the stock. The number of bullish hedge fund positions retreated by 3 in recent months. Our calculations also showed that pets isn't among the 30 most popular stocks among hedge funds. PETS was in 15 hedge funds' portfolios at the end of December. There were 18 hedge funds in our database with PETS positions at the end of the previous quarter.
To the average investor there are a multitude of methods market participants can use to assess stocks. Two of the less utilized methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the broader indices by a very impressive amount (see the details here).
[caption id="attachment_745225" align="aligncenter" width="473"] Noam Gottesman, GLG Partners[/caption]
We're going to view the latest hedge fund action surrounding Petmed Express Inc (NASDAQ:PETS).
How are hedge funds trading Petmed Express Inc (NASDAQ:PETS)?
Heading into the first quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PETS over the last 14 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jim Simons's Renaissance Technologies has the number one position in Petmed Express Inc (NASDAQ:PETS), worth close to $41.5 million, accounting for less than 0.1%% of its total 13F portfolio. On Renaissance Technologies's heels is Marshall Wace LLP, led by Paul Marshall and Ian Wace, holding a $11.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish include Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and Noam Gottesman's GLG Partners.
Seeing as Petmed Express Inc (NASDAQ:PETS) has witnessed a decline in interest from hedge fund managers, we can see that there was a specific group of money managers that slashed their full holdings last quarter. Interestingly, Steven Boyd's Armistice Capital cut the largest stake of the 700 funds watched by Insider Monkey, valued at an estimated $17.6 million in stock. Steve Cohen's fund, Point72 Asset Management, also sold off its stock, about $3 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.
Let's go over hedge fund activity in other stocks similar to Petmed Express Inc (NASDAQ:PETS). These stocks are Innophos Holdings, Inc. (NASDAQ:IPHS), Comstock Resources Inc (NYSE:CRK), Arcus Biosciences, Inc. (NYSE:RCUS), and Surgery Partners, Inc. (NASDAQ:SGRY). This group of stocks' market valuations are similar to PETS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IPHS,13,35241,3 CRK,8,4129,3 RCUS,9,70467,0 SGRY,9,27358,0 Average,9.75,34299,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $91 million in PETS's case. Innophos Holdings, Inc. (NASDAQ:IPHS) is the most popular stock in this table. On the other hand Comstock Resources Inc (NYSE:CRK) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Petmed Express Inc (NASDAQ:PETS) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately PETS wasn't nearly as popular as these 15 stock and hedge funds that were betting on PETS were disappointed as the stock returned -6% 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.