Is Perficient, Inc. (NASDAQ:PRFT) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Perficient, Inc. (NASDAQ:PRFT) shareholders have witnessed an increase in support from the world’s most elite money managers recently. Our calculations also showed that PRFT isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a glance at the fresh hedge fund action regarding Perficient, Inc. (NASDAQ:PRFT).
How have hedgies been trading Perficient, Inc. (NASDAQ:PRFT)?
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PRFT over the last 15 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
The largest stake in Perficient, Inc. (NASDAQ:PRFT) was held by Millennium Management, which reported holding $4.7 million worth of stock at the end of March. It was followed by AQR Capital Management with a $4.7 million position. Other investors bullish on the company included Arrowstreet Capital, GLG Partners, and Marshall Wace LLP.
As aggregate interest increased, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the largest position in Perficient, Inc. (NASDAQ:PRFT). Arrowstreet Capital had $3.9 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $0.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Minhua Zhang’s Weld Capital Management, Guy Shahar’s DSAM Partners, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s check out hedge fund activity in other stocks similar to Perficient, Inc. (NASDAQ:PRFT). These stocks are Kforce Inc. (NASDAQ:KFRC), National Energy Services Reunited Corp. (NASDAQ:NESR), HealthStream, Inc. (NASDAQ:HSTM), and NextPoint Residential Trust Inc (NYSE:NXRT). This group of stocks’ market caps are closest to PRFT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KFRC | 22 | 79198 | 1 |
| NESR | 8 | 34574 | 4 |
| HSTM | 14 | 49266 | 0 |
| NXRT | 10 | 145693 | 1 |
| Average | 13.5 | 77183 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $30 million in PRFT’s case. Kforce Inc. (NASDAQ:KFRC) is the most popular stock in this table. On the other hand National Energy Services Reunited Corp. (NASDAQ:NESR) is the least popular one with only 8 bullish hedge fund positions. Perficient, Inc. (NASDAQ:PRFT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on PRFT as the stock returned 22.1% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
