The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards PTC Inc (NASDAQ:PTC).
Is PTC Inc (NASDAQ:PTC) a buy, sell, or hold? Money managers are turning less bullish. The number of bullish hedge fund positions dropped by 6 lately. Our calculations also showed that ptc isn't among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to view the recent hedge fund action encompassing PTC Inc (NASDAQ:PTC).
How are hedge funds trading PTC Inc (NASDAQ:PTC)?
At Q1's end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the fourth quarter of 2018. On the other hand, there were a total of 36 hedge funds with a bullish position in PTC a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Select Equity Group was the largest shareholder of PTC Inc (NASDAQ:PTC), with a stake worth $250.4 million reported as of the end of March. Trailing Select Equity Group was OZ Management, which amassed a stake valued at $238.5 million. Praesidium Investment Management Company, Impax Asset Management, and Valinor Management were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as PTC Inc (NASDAQ:PTC) has experienced a decline in interest from the smart money, it's easy to see that there was a specific group of hedge funds that elected to cut their full holdings in the third quarter. Interestingly, Barry Rosenstein's JANA Partners dropped the biggest investment of the 700 funds tracked by Insider Monkey, comprising an estimated $35.4 million in stock. Pasco Alfaro / Richard Tumure's fund, Miura Global Management, also said goodbye to its stock, about $29.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 6 funds in the third quarter.
Let's go over hedge fund activity in other stocks similar to PTC Inc (NASDAQ:PTC). We will take a look at EXACT Sciences Corporation (NASDAQ:EXAS), EnCana Corporation (NYSE:ECA), Steris Plc (NYSE:STE), and Pinnacle West Capital Corporation (NYSE:PNW). This group of stocks' market valuations match PTC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EXAS,33,814522,3 ECA,44,1002031,4 STE,21,319546,-1 PNW,24,720582,-2 Average,30.5,714170,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $714 million. That figure was $1387 million in PTC's case. EnCana Corporation (NYSE:ECA) is the most popular stock in this table. On the other hand Steris Plc (NYSE:STE) is the least popular one with only 21 bullish hedge fund positions. PTC Inc (NASDAQ:PTC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately PTC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PTC investors were disappointed as the stock returned -7.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.