Was The Smart Money Right About Piling Into Planet Fitness Inc (PLNT)?

Out of 1000’s of shares which might be at present traded in the marketplace, it’s tough to establish these that can actually generate sturdy returns. Hedge funds and institutional buyers spend tens of millions of {dollars} on analysts with MBAs and PhDs, who’re business specialists and effectively linked to different business and media insiders on prime of that. Individual buyers can piggyback the hedge funds using these abilities and may profit from their huge sources and information in that approach. We analyze quarterly 13F filings of almost 900 hedge funds and, by wanting on the good cash sentiment that surrounds a inventory, we will decide whether or not it has the potential to beat the market over the long-term. Therefore, let’s take a more in-depth take a look at what good cash thinks about Planet Fitness Inc (NYSE:PLNT).

Planet Fitness Inc (NYSE:PLNT) buyers ought to take note of a rise in assist from the world’s most elite cash managers not too long ago. Planet Fitness Inc (NYSE:PLNT) was in 47 hedge funds’ portfolios on the finish of the fourth quarter of 2020. The all time excessive for this statistic was beforehand 45. This means the bullish variety of hedge fund positions on this inventory at present sits at its all time excessive. There have been 45 hedge funds in our database with PLNT holdings on the finish of September. Our calculations additionally confirmed that PLNT is not among the many 30 most popular stocks among hedge funds (click on for This autumn rankings).

Hedge funds’ fame as shrewd buyers has been tarnished within the final decade as their hedged returns could not sustain with the unhedged returns of the market indices. Hedge funds have greater than $3.5 trillion in property below administration, so you may’t count on their complete portfolios to beat the market by massive margins. Our analysis was capable of establish upfront a choose group of hedge fund holdings that outperformed the S&P 500 ETFs by greater than 124 proportion factors since March 2017 (see the details here). So you may nonetheless discover quite a lot of gems by following hedge funds’ strikes as we speak.

Ryan Frick Dorsal Capital

Ryan Frick of Dorsal Capital

At Insider Monkey we depart no stone unturned when in search of the following nice funding thought. For instance, lithium mining is likely one of the quickest rising industries proper now, so we’re trying out inventory pitches like this emerging lithium stock. We undergo lists like the ten best hydrogen fuel cell stocks to select the following Tesla that can ship a 10x return. Even although we suggest positions in solely a tiny fraction of the businesses we analyze, we try as many shares as we will. We learn hedge fund investor letters and take heed to inventory pitches at hedge fund conferences. You can subscribe to our free every day publication on our homepage. Now let’s analyze the newest hedge fund motion concerning Planet Fitness Inc (NYSE:PLNT).

Do Hedge Funds Think PLNT Is A Good Stock To Buy Now?

At the tip of the fourth quarter, a complete of 47 of the hedge funds tracked by Insider Monkey have been lengthy this inventory, a change of 4% from the earlier quarter. The graph beneath shows the variety of hedge funds with bullish place in PLNT over the past 22 quarters. So, let’s discover out which hedge funds have been among the many prime holders of the inventory and which hedge funds have been making large strikes.

More particularly, SRS Investment Management was the biggest shareholder of Planet Fitness Inc (NYSE:PLNT), with a stake price $547.1 million reported as of the tip of December. Trailing SRS Investment Management was Steadfast Capital Management, which amassed a stake valued at $238.2 million. Third Point, Broad Bay Capital, and Dorsal Capital Management have been additionally very keen on the inventory, turning into one of many largest hedge fund holders of the corporate. In phrases of the portfolio weights assigned to every place Broad Bay Capital allotted the most important weight to Planet Fitness Inc (NYSE:PLNT), round 13.34% of its 13F portfolio. Deep Field Asset Management can also be comparatively very bullish on the inventory, earmarking 9.4 p.c of its 13F fairness portfolio to PLNT.

With a common bullishness amongst the heavyweights, particular cash managers have been breaking floor themselves. Dorsal Capital Management, managed by Ryan Frick and Oliver Evans, assembled essentially the most priceless place in Planet Fitness Inc (NYSE:PLNT). Dorsal Capital Management had $64 million invested within the firm on the finish of the quarter. Edmond M. Safra’s EMS Capital additionally made a $56.7 million funding within the inventory through the quarter. The different funds with new positions within the inventory are Brennan Diaz’s Fernbridge Capital Management, Leonard A. Potter’s Wildcat Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s now check out hedge fund exercise in different shares – not essentially in the identical business as Planet Fitness Inc (NYSE:PLNT) however equally valued. These shares are nCino, Inc. (NASDAQ:NCNO), Manhattan Associates, Inc. (NASDAQ:MANH), PVH Corp (NYSE:PVH), Post Holdings Inc (NYSE:POST), ITT Inc. (NYSE:ITT), Futu Holdings Limited (NASDAQ:FUTU), and Kilroy Realty Corp (NYSE:KRC). This group of shares’ market caps resemble PLNT’s market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NCNO,28,177115,2 MANH,23,288212,1 PVH,37,1132304,9 POST,27,1536661,-3 ITT,28,406807,-2 FUTU,17,334170,2 KRC,25,251572,6 Average,26.4,589549,2.1 [/table]

View table here for those who expertise formatting points.

As you may see these shares had a mean of 26.4 hedge funds with bullish positions and the typical quantity invested in these shares was $590 million. That determine was $1705 million in PLNT’s case. PVH Corp (NYSE:PVH) is the preferred inventory on this desk. On the opposite hand Futu Holdings Limited (NASDAQ:FUTU) is the least in style one with solely 17 bullish hedge fund positions. Compared to those shares Planet Fitness Inc (NYSE:PLNT) is extra in style amongst hedge funds. Our general hedge fund sentiment rating for PLNT is 87. Stocks with greater variety of hedge fund positions relative to different shares in addition to relative to their historic vary obtain the next sentiment rating. Our calculations confirmed that top 10 most popular stocks amongst hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 proportion factors. These shares gained 13.6% in 2021 by April thirtieth and nonetheless beat the market by 1.6 proportion factors. Unfortunately PLNT wasn’t almost as in style as these 10 shares and hedge funds that have been betting on PLNT have been upset because the inventory returned 8.2% because the finish of the fourth quarter (by 4/30) and underperformed the market. If you have an interest in investing in massive cap shares with big upside potential, it is best to try the top 10 most popular stocks amongst hedge funds as most of those shares already outperformed the market since 2019.

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Disclosure: None. This article was initially revealed at Insider Monkey.

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