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Is Premier Financial Corp. (NASDAQ:PFC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is PFC a good stock to buy now? Premier Financial Corp. (NASDAQ:PFC) was in 13 hedge funds' portfolios at the end of September. The all time high for this statistic is 12. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. PFC has experienced an increase in hedge fund sentiment recently. There were 10 hedge funds in our database with PFC positions at the end of the second quarter. Our calculations also showed that PFC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are perceived as underperforming, old investment vehicles of years past. While there are more than 8000 funds trading at the moment, Our experts look at the leaders of this club, around 850 funds. These hedge fund managers manage bulk of all hedge funds' total asset base, and by monitoring their first-class investments, Insider Monkey has unsheathed several investment strategies that have historically exceeded the market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Emanuel Friedman of EJF CapitalEmanuel Friedman
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we're going to take a peek at the key hedge fund action regarding Premier Financial Corp. (NASDAQ:PFC).
Do Hedge Funds Think PFC Is A Good Stock To Buy Now?
At the end of September, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PFC over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies has the largest position in Premier Financial Corp. (NASDAQ:PFC), worth close to $18.5 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Polaris Capital Management, led by Bernard Horn, holding a $8.3 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism encompass Fred Cummings's Elizabeth Park Capital Management, Frederick DiSanto's Ancora Advisors and Emanuel J. Friedman's EJF Capital. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Premier Financial Corp. (NASDAQ:PFC), around 3.75% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, setting aside 0.41 percent of its 13F equity portfolio to PFC.
As aggregate interest increased, specific money managers have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, created the largest position in Premier Financial Corp. (NASDAQ:PFC). ExodusPoint Capital had $0.9 million invested in the company at the end of the quarter. Minhua Zhang's Weld Capital Management also initiated a $0.2 million position during the quarter. The only other fund with a brand new PFC position is Cliff Asness's AQR Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Premier Financial Corp. (NASDAQ:PFC) but similarly valued. We will take a look at America's Car-Mart, Inc. (NASDAQ:CRMT), Cass Information Systems, Inc. (NASDAQ:CASS), Celldex Therapeutics, Inc. (NASDAQ:CLDX), Natus Medical Inc (NASDAQ:NTUS), Unitil Corporation (NYSE:UTL), Veeco Instruments Inc. (NASDAQ:VECO), and National Presto Industries Inc. (NYSE:NPK). All of these stocks' market caps resemble PFC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRMT,9,63653,-5 CASS,5,11771,-4 CLDX,23,292439,1 NTUS,24,72772,1 UTL,11,44842,2 VECO,19,290411,-1 NPK,11,60130,3 Average,14.6,119431,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $119 million. That figure was $47 million in PFC's case. Natus Medical Inc (NASDAQ:NTUS) is the most popular stock in this table. On the other hand Cass Information Systems, Inc. (NASDAQ:CASS) is the least popular one with only 5 bullish hedge fund positions. Premier Financial Corp. (NASDAQ:PFC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PFC is 59.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on PFC as the stock returned 46.9% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.