Is Progyny, Inc. (PGNY) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Progyny, Inc. (NASDAQ:PGNY) based on that data.

Is PGNY a good stock to buy? Progyny, Inc. (NASDAQ:PGNY) was in 28 hedge funds’ portfolios at the end of September. The all time high for this statistic is 39. PGNY investors should pay attention to a decrease in support from the world’s most elite money managers recently. There were 39 hedge funds in our database with PGNY positions at the end of the second quarter. Our calculations also showed that PGNY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s review the new hedge fund action surrounding Progyny, Inc. (NASDAQ:PGNY).

Dmitry Balyasny of Balyasny Asset Management

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

At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -28% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PGNY over the last 25 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.

The largest stake in Progyny, Inc. (NASDAQ:PGNY) was held by OrbiMed Advisors, which reported holding $71.1 million worth of stock at the end of September. It was followed by Owls Nest Partners with a $29.2 million position. Other investors bullish on the company included Crestwood Capital Management, Renaissance Technologies, and General Equity Partners. In terms of the portfolio weights assigned to each position Owls Nest Partners allocated the biggest weight to Progyny, Inc. (NASDAQ:PGNY), around 12.23% of its 13F portfolio. General Equity Partners is also relatively very bullish on the stock, earmarking 7.85 percent of its 13F equity portfolio to PGNY.

Since Progyny, Inc. (NASDAQ:PGNY) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that decided to sell off their positions entirely heading into Q4. Interestingly, Jeffrey Talpins’s Element Capital Management dropped the largest position of the “upper crust” of funds monitored by Insider Monkey, comprising close to $23.6 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $16.6 million worth. These transactions are important to note, as total hedge fund interest was cut by 11 funds heading into Q4.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Progyny, Inc. (NASDAQ:PGNY) but similarly valued. These stocks are Flowers Foods, Inc. (NYSE:FLO), The Timken Company (NYSE:TKR), Valmont Industries, Inc. (NYSE:VMI), Hexcel Corporation (NYSE:HXL), The Goodyear Tire & Rubber Company (NASDAQ:GT), Alkermes Plc (NASDAQ:ALKS), and Antero Midstream Corp (NYSE:AM). This group of stocks’ market valuations are closest to PGNY’s market valuation.

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As you can see these stocks had an average of 23.6 hedge funds with bullish positions and the average amount invested in these stocks was $351 million. That figure was $200 million in PGNY’s case. The Goodyear Tire & Rubber Company (NASDAQ:GT) is the most popular stock in this table. On the other hand Antero Midstream Corp (NYSE:AM) is the least popular one with only 14 bullish hedge fund positions. Progyny, Inc. (NASDAQ:PGNY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PGNY is 46. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 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 -12.4% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.

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