Hedge Funds Are Crazy About Progyny, Inc. (PGNY)

In this article we will take a look at whether hedge funds think Progyny, Inc. (NASDAQ:PGNY) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is Progyny, Inc. (NASDAQ:PGNY) a buy here? The best stock pickers were getting more optimistic. The number of long hedge fund bets advanced by 13 recently. Progyny, Inc. (NASDAQ:PGNY) was in 39 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PGNY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 26 hedge funds in our database with PGNY positions at the end of the first quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Jeffrey Talpins of Element Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to analyze the latest hedge fund action encompassing Progyny, Inc. (NASDAQ:PGNY).

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

At second quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in PGNY a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Among these funds, OrbiMed Advisors held the most valuable stake in Progyny, Inc. (NASDAQ:PGNY), which was worth $80.6 million at the end of the second quarter. On the second spot was Owls Nest Partners which amassed $27.1 million worth of shares. Element Capital Management, Citadel Investment Group, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Owls Nest Partners allocated the biggest weight to Progyny, Inc. (NASDAQ:PGNY), around 12.49% of its 13F portfolio. Crestwood Capital Management is also relatively very bullish on the stock, dishing out 4.71 percent of its 13F equity portfolio to PGNY.

As one would reasonably expect, some big names were leading the bulls’ herd. Element Capital Management, managed by Jeffrey Talpins, created the largest position in Progyny, Inc. (NASDAQ:PGNY). Element Capital Management had $23.6 million invested in the company at the end of the quarter. Frank Fu’s CaaS Capital also made a $14.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Sander Gerber’s Hudson Bay Capital Management, Chris Rokos’s Rokos Capital Management, and Benjamin A. Smith’s Laurion Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Progyny, Inc. (NASDAQ:PGNY) but similarly valued. We will take a look at Rapid7 Inc (NASDAQ:RPD), Leslie’s, Inc. (NASDAQ:LESL), Everbridge, Inc. (NASDAQ:EVBG), The Wendy’s Company (NASDAQ:WEN), Altair Engineering Inc. (NASDAQ:ALTR), Alliance Data Systems Corporation (NYSE:ADS), and Cyberark Software Ltd (NASDAQ:CYBR). This group of stocks’ market caps are closest to PGNY’s market cap.

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As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $757 million. That figure was $290 million in PGNY’s case. Leslie’s, Inc. (NASDAQ:LESL) is the most popular stock in this table. On the other hand Rapid7 Inc (NASDAQ:RPD) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Progyny, Inc. (NASDAQ:PGNY) is more popular among hedge funds. Our overall hedge fund sentiment score for PGNY is 90. Stocks with 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 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Unfortunately PGNY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PGNY were disappointed as the stock returned -2.3% since the end of the second quarter (through 10/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.