Where are the hedge funds at PagSeguro Digital Ltd. (PAGS)?
At Insider Monkey, we review filings from nearly 867 top investment firms on a quarterly basis, a process we have now completed for the last reporting period. The data we have thus collected gives us access to a wealth of collective knowledge based on the portfolio holdings of these companies as of September 30. In this article, we’ll use this wealth of knowledge to determine whether PagSeguro Digital Ltd. (NYSE: PAGS) is a good investment right now.
PagSeguro Digital Ltd. (NYSE: PAGS) was listed in 41 hedge fund portfolios at the end of September. The all-time high for this statistic is 48. PAGS has seen an increase in enthusiasm from smart money in recent months. There were 40 hedge funds in our database with PAGS positions at the end of the second quarter. Our calculations also showed that PAGS is not among the top 30 most popular stocks among hedge funds (click for Q3 rank).
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, lithium prices have more than doubled in the past year, so we’re going through lists like the top 10 electric vehicle stocks to pick the next Tesla that will deliver 10x performance. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. With that in mind, we’re going to go over the latest hedge fund action regarding PagSeguro Digital Ltd. (NYSE: PAGS).
Do hedge funds think PAGS is a good stock to buy now?
At the end of September, 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a variation of 3% compared to the second quarter of 2021. The graph below shows the number of hedge funds with a bullish position on PAGS over the years. Last 25 quarters. So let’s see which hedge funds were among the top stock holders and which hedge funds were making big moves.
Largest stake in PagSeguro Digital Ltd. (NYSE: PAGS) was owned by Sylebra Capital Management, which said it held $ 490.4 million in stock at the end of September. It was followed by Melvin Capital Management with a position of $ 362 million. Other optimistic investors for the company included Melvin Capital Management, Samlyn Capital and Palestra Capital Management. In terms of the portfolio weights assigned to each position, Tekne Capital Management assigned the largest weight to PagSeguro Digital Ltd. (NYSE: PAGS), approximately 27.33% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, allocating 11.04% of its 13F equity portfolio to PAGS.
With general optimism among the heavyweights, specific fund managers jumped into PagSeguro Digital Ltd. (NYSE: PAGS) head first. LMR Partners, led by Ben Levine, Andrew Manuel and Stefan Renold, has created the most valuable position in PagSeguro Digital Ltd. (NYSE: PAGS). LMR Partners had $ 24.1 million invested in the company at the end of the quarter. Ricky Sandler’s Eminence Capital also initiated a $ 22.4 million position during the quarter. Other funds with new equity positions are Portsea Asset Management by Cyrus de Weck, Alyeska Investment Group by Anand Parekh and Castle Hook Partners by Josh Donfeld and David Rogers.
Now let’s review hedge fund activity in other stocks – not necessarily in the same industry as PagSeguro Digital Ltd. (NYSE: PAGS) but of similar value. We’ll be looking at Continental Resources, Inc. (NYSE: CLR), Wheaton Precious Metals Corp. (NYSE: WPM), Boston Properties, Inc. (NYSE: BXP), ASE Technology Holding Co., Ltd. (NYSE: ASX), Carlyle Group Inc (NASDAQ: CG), Ceridian HCM Holding Inc. (NYSE: CDAY) and Celanese Corporation (NYSE: CE). The market values ââof this group of shares resemble the market value of PAGS.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of position HF CLR, 24.166253.1 WPM, 27.347520.1 BXP, 21.1471101.2 ASX, 10.271536.3 CG , 34,1401572,13 CDAY, 20,1798355, -5 CE, 26 735190, -11 Medium, 23,1,884504,0,6 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $ 885 million. That figure was $ 2,447 million in the case of PAGS. Carlyle Group Inc (NASDAQ: CG) is the most popular stock in this table. On the other hand, ASE Technology Holding Co., Ltd. (NYSE: ASX) is the least popular with only 10 bullish hedge fund positions. In relation to these actions, PagSeguro Digital Ltd. (NYSE: PAGS) is more popular among hedge funds. Our overall hedge fund sentiment score for PAGS is 81.6. 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. Our calculations showed that the 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 28.6% in 2021 through November 30 and have consistently beat the market by 5.6 percentage points. Unfortunately, PAGS was not as popular as these 5 stocks and the hedge funds that bet on PAGS were disappointed as the stock returned -50.6% since the end of the third quarter (through 11/30) and underperformed the market. If you are looking to invest in large cap stocks with huge upside potential, you should check out the 5 most popular stocks among hedge funds, as most of these stocks have already outperformed the market since 2019.
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Disclosure: none. This article originally appeared on Insider Monkey.