Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Perficient, Inc. (NASDAQ:PRFT).
Perficient, Inc. (NASDAQ:PRFT) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds’ portfolios at the end of the second quarter of 2019. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Geopark Limited (NYSE:GPRK), G1 Therapeutics, Inc. (NASDAQ:GTHX), and New Mountain Finance Corporation (NYSE:NMFC) to gather more data points. Our calculations also showed that PRFT isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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. 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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to review the latest hedge fund action encompassing Perficient, Inc. (NASDAQ:PRFT).
How are hedge funds trading Perficient, Inc. (NASDAQ:PRFT)?
At Q2’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in PRFT over the last 16 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Perficient, Inc. (NASDAQ:PRFT), with a stake worth $13.6 million reported as of the end of March. Trailing Millennium Management was SG Capital Management, which amassed a stake valued at $5.5 million. McKinley Capital Management, Arrowstreet Capital, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Perficient, Inc. (NASDAQ:PRFT) has faced falling interest from the aggregate hedge fund industry, logic holds that there were a few hedgies that decided to sell off their entire stakes in the second quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the largest investment of the 750 funds followed by Insider Monkey, worth about $3.5 million in call options. Matthew Hulsizer’s fund, PEAK6 Capital Management, also sold off its call options, about $1.4 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Perficient, Inc. (NASDAQ:PRFT). We will take a look at Geopark Limited (NYSE:GPRK), G1 Therapeutics, Inc. (NASDAQ:GTHX), New Mountain Finance Corporation (NYSE:NMFC), and National Bank Holdings Corporation (NYSE:NBHC). This group of stocks’ market caps match PRFT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GPRK | 10 | 95513 | -3 |
| GTHX | 10 | 47048 | -1 |
| NMFC | 11 | 35819 | 2 |
| NBHC | 10 | 90981 | 2 |
| Average | 10.25 | 67340 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $51 million in PRFT’s case. New Mountain Finance Corporation (NYSE:NMFC) is the most popular stock in this table. On the other hand Geopark Limited (NYSE:GPRK) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Perficient, Inc. (NASDAQ:PRFT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on PRFT as the stock returned 12.4% during Q3 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
