Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Perficient, Inc. (NASDAQ:PRFT).
Is Perficient, Inc. (NASDAQ:PRFT) worth your attention right now? Hedge funds are in a bearish mood. The number of bullish hedge fund bets went down by 1 in recent months. Our calculations also showed that PRFT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are seen as unimportant, old investment vehicles of the past. While there are more than 8000 funds with their doors open at the moment, Our experts choose to focus on the crème de la crème of this club, about 750 funds. Most estimates calculate that this group of people administer the lion’s share of the hedge fund industry’s total capital, and by following their highest performing picks, Insider Monkey has found a number of investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Richard Driehaus of Driehaus Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a glance at the new hedge fund action regarding Perficient, Inc. (NASDAQ:PRFT).
How have hedgies been trading Perficient, Inc. (NASDAQ:PRFT)?
At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PRFT over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Driehaus Capital was the largest shareholder of Perficient, Inc. (NASDAQ:PRFT), with a stake worth $19.8 million reported as of the end of September. Trailing Driehaus Capital was Millennium Management, which amassed a stake valued at $9.9 million. Intrinsic Edge Capital, GLG Partners, and AQR Capital 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 Manatuck Hill Partners allocated the biggest weight to Perficient, Inc. (NASDAQ:PRFT), around 2.33% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, designating 0.83 percent of its 13F equity portfolio to PRFT.
Judging by the fact that Perficient, Inc. (NASDAQ:PRFT) has experienced falling interest from the aggregate hedge fund industry, we can see that there is a sect of money managers who sold off their full holdings in the third quarter. Intriguingly, Ken Grossman and Glen Schneider’s SG Capital Management sold off the biggest stake of all the hedgies tracked by Insider Monkey, worth an estimated $5.5 million in stock, and Robert B. Gillam’s McKinley Capital Management was right behind this move, as the fund cut about $5.3 million worth. These moves are interesting, as aggregate hedge fund interest fell by 1 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Perficient, Inc. (NASDAQ:PRFT). We will take a look at Pampa Energia S.A. (NYSE:PAM), S & T Bancorp Inc (NASDAQ:STBA), Armada Hoffler Properties Inc (NYSE:AHH), and Knoll Inc (NYSE:KNL). This group of stocks’ market caps resemble PRFT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PAM | 10 | 64708 | -2 |
| STBA | 10 | 24720 | -1 |
| AHH | 14 | 91721 | 5 |
| KNL | 15 | 59319 | -1 |
| Average | 12.25 | 60117 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $64 million in PRFT’s case. Knoll Inc (NYSE:KNL) is the most popular stock in this table. On the other hand Pampa Energia S.A. (NYSE:PAM) is the least popular one with only 10 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on PRFT, though not to the same extent, as the stock returned 9.6% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
