Hedge funds pile up in Party City Holdco Inc (PRTY)

Financial regulations require hedge funds and high net worth investors who have crossed the $ 100 million threshold to file a report showing their positions at the end of each quarter. While not the intention, these deposits level the playing field to some extent for ordinary investors. The latest round of 13F deposits revealed the fund’s positions on June 30. At Insider Monkey, we’ve created a comprehensive database of over 873 of these established hedge funds and famous value investor records. In this article, we take a look at how these elite funds and top investors traded Party City Holdco Inc (NYSE:PRTY) on the basis of these deposits.

Party City Holdco Inc (NYSE:PRTY) has recently seen an increase in the activity of the world’s largest hedge funds. Party City Holdco Inc (NYSE:PRTY) was in 20 hedge fund portfolios at the end of the second quarter of 2021. The all-time high for this statistic was previously 19. This means that the bullish number of hedge fund positions in this stock is currently at its highest level. Our calculations also showed that PRTY is not one of the 30 most popular stocks among hedge funds (click for Q2 ranking).

In the financial world, there are a number of tools available to investors for valuing stocks. A pair of the lesser-known tools are the hedge fund and insider trading indicators. We have shown that historically those who follow the best picks of the best fund managers can outperform larger indices by a solid amount. Insider Monkey’s monthly stock picks have returned 185.4% since March 2017 and have outperformed S&P 500 ETFs by more than 79 percentage points (see details here). This is why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, the plant-based food market is expected to explode by 100 by 2050, so we check that stock under the radar. We go through lists like the 10 best growth stocks to buy to choose the next Tesla which will offer a 10x return. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can subscribe to our free daily newsletter at our home page. With all of that in mind, let’s take a look at new hedge fund action regarding Party City Holdco Inc (NYSE:PRTY).

Do hedge funds think PRTY is a good stock to buy now?

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 5% change from the previous quarter. By comparison, 14 hedge funds held bullish stocks or call options in PRTY a year ago. So let’s see which hedge funds were among the top stock holders and which hedge funds were making big moves.

Of these funds, CAS Investment Partners held the largest stake in Party City Holdco Inc (NYSE: PRTY), which stood at $ 149.2 million at the end of the second quarter. In second place was Renaissance Technologies, which raised $ 18.8 million in shares. Two advisers Sigma, Arrowstreet Capital and Woodson Capital Management were also very fond of the stock, becoming one of the firm’s largest hedge fund holders. In terms of portfolio weights assigned to each position CAS investment partners assigned the greatest weight to Party City Holdco Inc (NYSE: PRTY), approximately 6.34% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, designating 2.37% of its 13F equity portfolio at PRTY.

With a general uptrend among the heavyweights, a few big names led the bull herd. Woodson Capital Management, managed by James Woodson Davis, initiated the largest position in Party City Holdco Inc (NYSE: PRTY). Woodson Capital Management had invested $ 16.8 million in the company at the end of the quarter. Wilmot B. Harkey and Daniel Mack’s Nantahala capital management also initiated a $ 9.3 million position during the quarter. Other funds with new equity positions are Masters Capital Management by Mike Masters, DE Shaw by DE Shaw and Balyasny Asset Management by Dmitry Balyasny.

Let’s look at hedge fund activity in other stocks – not necessarily in the same industry as Party City Holdco Inc (NYSE: PRTY) but of similar value. We’ll take a look at Kraton Corporation (NYSE:KRA), Immunovant, Inc. (NASDAQ:IMVT), Ferroglobe PLC (NASDAQ:GSM), AngioDynamics, Inc. (NASDAQ:ANGO), TPG RE Finance Trust, Inc. (NYSE:TRTX), SI-BONE, Inc. (NASDAQ:SIBN) and So-Young International Inc. (NASDAQ:SY). The market valuations of this group of stocks are similar to the market valuation of PRTY.

[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position KRA, 19.131989, -1 IMVT, 21.99203, -5 GSM, 19.145796.3 ANGO, 22.155307, 7 TRTX, 10 32371.2 SIBN, 28 202365.2 SY, 5.14330, -1 Medium, 17.7.1111623.1 [/table]

See the table here if you have formatting problems.

As you can see, these stocks had an average of 17.7 hedge funds with bullish positions and the average amount invested in these stocks was $ 112 million. That figure was $ 256 million in the case of PRTY. SI-BONE, Inc. (NASDAQ:SIBN) is the most popular action in this table. On the other hand, So-Young International Inc. (NASDAQ:SY) is the least popular with only 5 bullish hedge fund positions. Party City Holdco Inc (NYSE: PRTY) isn’t the most popular stock in this group, but hedge fund interest is still above average. Our overall hedge fund sentiment score for PRTY is 68.6. Stocks with a higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal, but we prefer to spend our time researching the stocks on which hedge funds are accumulating. Our calculations have shown that top 5 most popular stocks among hedge funds, returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22 and again beat the market by 1.6 percentage points. Unfortunately, PRTY was not as popular as these 5 stocks and the hedge funds betting on PRTY were disappointed as the stock has returned -23.7% since the end of June (through 10/22) and has under- performed the market. If you want to invest in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds, as many of these stocks have already outperformed the market since 2019.

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Disclosure: none. This article originally appeared on Monkey initiate.

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