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We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of Planet Fitness Inc (NYSE:PLNT) based on that data.
Is PLNT a good stock to buy now? Money managers were buying. The number of long hedge fund bets went up by 1 lately. Planet Fitness Inc (NYSE:PLNT) was in 45 hedge funds' portfolios at the end of September. The all time high for this statistic is 44. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PLNT 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). There were 44 hedge funds in our database with PLNT positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Dan Loeb of Third Point
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Do Hedge Funds Think PLNT Is A Good Stock To Buy Now?
At third quarter's end, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from the second quarter of 2020. On the other hand, there were a total of 37 hedge funds with a bullish position in PLNT 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.
The largest stake in Planet Fitness Inc (NYSE:PLNT) was held by SRS Investment Management, which reported holding $361.3 million worth of stock at the end of September. It was followed by Steadfast Capital Management with a $245.7 million position. Other investors bullish on the company included Pelham Capital, Tybourne Capital Management, and Broad Bay Capital. In terms of the portfolio weights assigned to each position Broad Bay Capital allocated the biggest weight to Planet Fitness Inc (NYSE:PLNT), around 13.7% of its 13F portfolio. Pelham Capital is also relatively very bullish on the stock, setting aside 10.82 percent of its 13F equity portfolio to PLNT.
Now, key money managers have jumped into Planet Fitness Inc (NYSE:PLNT) headfirst. Southpoint Capital Advisors, managed by John Smith Clark, assembled the most valuable position in Planet Fitness Inc (NYSE:PLNT). Southpoint Capital Advisors had $88.1 million invested in the company at the end of the quarter. Dan Loeb's Third Point also made a $47.6 million investment in the stock during the quarter. The following funds were also among the new PLNT investors: James Parsons's Junto Capital Management, Alok Agrawal's Bloom Tree Partners, and Kerr Neilson's Platinum Asset Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Planet Fitness Inc (NYSE:PLNT) but similarly valued. These stocks are HUYA Inc. (NYSE:HUYA), Comerica Incorporated (NYSE:CMA), Elbit Systems Ltd. (NASDAQ:ESLT), Canopy Growth Corporation (NASDAQ:CGC), Woori Financial Group Inc. (NYSE:WF), Vivint Solar Inc (NYSE:VSLR), and Levi Strauss & Co. (NYSE:LEVI). This group of stocks' market values resemble PLNT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HUYA,22,390686,1 CMA,30,453794,-6 ESLT,4,10024,0 CGC,9,19074,-2 WF,2,2940,-3 VSLR,23,736401,11 LEVI,17,51394,1 Average,15.3,237759,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $238 million. That figure was $1553 million in PLNT's case. Comerica Incorporated (NYSE:CMA) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Planet Fitness Inc (NYSE:PLNT) is more popular among hedge funds. Our overall hedge fund sentiment score for PLNT is 86. 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 returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on PLNT as the stock returned 22.9% since the end of September (through 12/8) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.