The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Pool Corporation (NASDAQ:POOL).
Pool Corporation (NASDAQ:POOL) investors should pay attention to a decrease in hedge fund interest in recent months. POOL was in 16 hedge funds' portfolios at the end of March. There were 17 hedge funds in our database with POOL holdings at the end of the previous quarter. Our calculations also showed that pool 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' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to check out the recent hedge fund action surrounding Pool Corporation (NASDAQ:POOL).
How are hedge funds trading Pool Corporation (NASDAQ:POOL)?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in POOL 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.
Among these funds, Fisher Asset Management held the most valuable stake in Pool Corporation (NASDAQ:POOL), which was worth $87.8 million at the end of the first quarter. On the second spot was Impax Asset Management which amassed $66.3 million worth of shares. Moreover, Royce & Associates, GLG Partners, and Echo Street Capital Management were also bullish on Pool Corporation (NASDAQ:POOL), allocating a large percentage of their portfolios to this stock.
Due to the fact that Pool Corporation (NASDAQ:POOL) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there exists a select few fund managers that elected to cut their positions entirely in the third quarter. At the top of the heap, Richard Chilton's Chilton Investment Company said goodbye to the largest stake of the "upper crust" of funds watched by Insider Monkey, valued at an estimated $10.7 million in stock, and Jim Simons's Renaissance Technologies was right behind this move, as the fund dropped about $9.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Pool Corporation (NASDAQ:POOL) but similarly valued. We will take a look at Phillips 66 Partners LP (NYSE:PSXP), KT Corporation (NYSE:KT), Ultrapar Participacoes SA (NYSE:UGP), and Newell Brands Inc. (NASDAQ:NWL). This group of stocks' market values resemble POOL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PSXP,4,9165,-2 KT,19,267347,3 UGP,12,60086,9 NWL,30,1295242,0 Average,16.25,407960,2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $408 million. That figure was $249 million in POOL's case. Newell Brands Inc. (NASDAQ:NWL) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only 4 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 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 POOL as the stock returned 14.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.