The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards PRA Health Sciences Inc (NASDAQ:PRAH).
PRA Health Sciences Inc (NASDAQ:PRAH) shareholders have witnessed an increase in hedge fund sentiment in recent months. PRAH was in 23 hedge funds’ portfolios at the end of the third quarter of 2016. There were 18 hedge funds in our database with PRAH positions at the end of the previous quarter. At the end of this article we will also compare PRAH to other stocks including Tech Data Corp (NASDAQ:TECD), Compass Minerals International, Inc. (NYSE:CMP), and Allegiant Travel Company (NASDAQ:ALGT) to get a better sense of its popularity.
Follow Pra Health Sciences Inc. (NASDAQ:PRAH)
Follow Pra Health Sciences Inc. (NASDAQ:PRAH)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, let’s analyze the key action surrounding PRA Health Sciences Inc (NASDAQ:PRAH).
What have hedge funds been doing with PRA Health Sciences Inc (NASDAQ:PRAH)?
Heading into the fourth quarter of 2016, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a jump of 28% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Paul Marshall and Ian Wace’s Marshall Wace LLP has the number one position in PRA Health Sciences Inc (NASDAQ:PRAH), worth close to $48.3 million, amounting to 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $38.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish comprise Arthur B Cohen and Joseph Healey’s Healthcor Management LP, Robert Pohly’s Samlyn Capital and Anand Parekh’s Alyeska Investment Group.
As aggregate interest increased, specific money managers have jumped into PRA Health Sciences Inc (NASDAQ:PRAH) headfirst. Samlyn Capital, managed by Robert Pohly, created the most valuable position in PRA Health Sciences Inc (NASDAQ:PRAH). According to regulatory filings, the fund had $29.9 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $17.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson’s Adage Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now review hedge fund activity in other stocks similar to PRA Health Sciences Inc (NASDAQ:PRAH). We will take a look at Tech Data Corp (NASDAQ:TECD), Compass Minerals International, Inc. (NYSE:CMP), Allegiant Travel Company (NASDAQ:ALGT), and Pan American Silver Corp. (USA) (NASDAQ:PAAS). This group of stocks’ market caps resemble that of PRAH.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TECD | 22 | 294161 | 6 |
| CMP | 6 | 74130 | -5 |
| ALGT | 21 | 225333 | 3 |
| PAAS | 20 | 195961 | 3 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $257 million in PRAH’s case. Tech Data Corp (NASDAQ:TECD) is the most popular stock in this table. On the other hand Compass Minerals International, Inc. (NYSE:CMP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks PRA Health Sciences Inc (NASDAQ:PRAH) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: none.
