Is Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) a good bet right now? We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) was in 3 hedge funds' portfolios at the end of September. PAC investors should be aware of a decrease in hedge fund interest lately. There were 4 hedge funds in our database with PAC holdings at the end of the previous quarter. Our calculations also showed that PAC isn't among the 30 most popular stocks among hedge funds.
To the average investor there are a multitude of methods market participants put to use to size up stocks. A duo of the most under-the-radar methods are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the S&P 500 by a significant amount (see the details here).
[caption id="attachment_30621" align="aligncenter" width="487"] Cliff Asness of AQR Capital Management[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's check out the recent hedge fund action encompassing Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC).
What does smart money think about Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in PAC a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC), which was worth $90.2 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $1.6 million worth of shares. AQR Capital Management was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC), around 0.08% of its portfolio. Arrowstreet Capital is also relatively very bullish on the stock, designating 0.0037 percent of its 13F equity portfolio to PAC.
Due to the fact that Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) has faced a decline in interest from the smart money, we can see that there exists a select few funds that decided to sell off their positions entirely by the end of the third quarter. At the top of the heap, Matthew Tewksbury's Stevens Capital Management sold off the largest position of the "upper crust" of funds monitored by Insider Monkey, valued at an estimated $0.4 million in stock, and Donald Sussman's Paloma Partners was right behind this move, as the fund dumped about $0.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) but similarly valued. We will take a look at L Brands Inc (NYSE:LB), Tripadvisor Inc (NASDAQ:TRIP), Flex Ltd. (NASDAQ:FLEX), and Leggett & Platt, Incorporated (NYSE:LEG). This group of stocks' market values are similar to PAC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LB,36,542095,6 TRIP,29,1050535,3 FLEX,31,1478106,-3 LEG,10,53164,1 Average,26.5,780975,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $781 million. That figure was $93 million in PAC's case. L Brands Inc (NYSE:LB) is the most popular stock in this table. On the other hand Leggett & Platt, Incorporated (NYSE:LEG) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (NYSE:PAC) is even less popular than LEG. Hedge funds clearly dropped the ball on PAC as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. A small number of hedge funds were also right about betting on PAC as the stock returned 8.8% during the fourth quarter (through 11/22) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.