Looking for stocks with high upside potential? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 5.7% in the 12 months ending October 26 (including dividend payments). Conversely, hedge funds’ 30 preferred S&P 500 stocks (as of June 2014) generated a return of 15.1% during the same 12-month period, with 53% of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds' stock picks generate superior risk-adjusted returns. That's why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Party City Holdco Inc (NYSE:PRTY).
Is Party City Holdco Inc (NYSE:PRTY) a buy here? Hedge funds are in an optimistic mood. The number of long hedge fund positions advanced by 1 recently. Our calculations also showed that PRTY isn't among the 30 most popular stocks among hedge funds. PRTY was in 18 hedge funds' portfolios at the end of the third quarter of 2018. There were 17 hedge funds in our database with PRTY positions at the end of the previous quarter.
According to most investors, hedge funds are assumed to be unimportant, outdated financial vehicles of years past. While there are greater than 8,000 funds in operation at present, We hone in on the upper echelon of this club, around 700 funds. These hedge fund managers command the lion's share of all hedge funds' total capital, and by keeping an eye on their unrivaled equity investments, Insider Monkey has identified a few investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by 6 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
We're going to review the fresh hedge fund action encompassing Party City Holdco Inc (NYSE:PRTY).
How are hedge funds trading Party City Holdco Inc (NYSE:PRTY)?
At Q3's end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in PRTY heading into this year. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.