The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 730 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of June 28th, 2019. In this article we are going to take a look at smart money sentiment towards PagSeguro Digital Ltd. (NYSE:PAGS).
Hedge fund interest in PagSeguro Digital Ltd. (NYSE:PAGS) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare PAGS to other stocks including Hologic, Inc. (NASDAQ:HOLX), Cna Financial Corporation (NYSE:CNA), and UDR, Inc. (NYSE:UDR) to get a better sense of its popularity. Our calculations also showed that PAGS isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are numerous gauges investors employ to analyze their holdings. Some of the less utilized gauges are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the S&P 500 by a healthy amount (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to review the fresh hedge fund action surrounding PagSeguro Digital Ltd. (NYSE:PAGS).
What does smart money think about PagSeguro Digital Ltd. (NYSE:PAGS)?
At Q2's end, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PAGS over the last 16 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Melvin Capital Management was the largest shareholder of PagSeguro Digital Ltd. (NYSE:PAGS), with a stake worth $368.7 million reported as of the end of March. Trailing Melvin Capital Management was Sylebra Capital Management, which amassed a stake valued at $282.1 million. Valiant Capital, Hunt Lane Capital, and Point72 Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that PagSeguro Digital Ltd. (NYSE:PAGS) has experienced bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of fund managers who were dropping their entire stakes by the end of the second quarter. It's worth mentioning that Brett Barakett's Tremblant Capital dropped the biggest position of the 750 funds tracked by Insider Monkey, totaling about $60.2 million in stock, and Ken Heebner's Capital Growth Management was right behind this move, as the fund dumped about $40.7 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as PagSeguro Digital Ltd. (NYSE:PAGS) but similarly valued. We will take a look at Hologic, Inc. (NASDAQ:HOLX), Cna Financial Corporation (NYSE:CNA), UDR, Inc. (NYSE:UDR), and Expeditors International of Washington, Inc. (NASDAQ:EXPD). This group of stocks' market caps are closest to PAGS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HOLX,32,778134,9 CNA,12,87925,-2 UDR,16,645705,-2 EXPD,25,398382,-5 Average,21.25,477537,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $478 million. That figure was $1381 million in PAGS's case. Hologic, Inc. (NASDAQ:HOLX) is the most popular stock in this table. On the other hand Cna Financial Corporation (NYSE:CNA) is the least popular one with only 12 bullish hedge fund positions. PagSeguro Digital Ltd. (NYSE:PAGS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on PAGS as the stock returned 18.8% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.