The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider ProPhase Labs Inc (NASDAQ:PRPH) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is PRPH a good stock to buy now. ProPhase Labs Inc (NASDAQ:PRPH) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. PRPH has experienced an increase in hedge fund interest of late. There were 1 hedge funds in our database with PRPH positions at the end of the fourth quarter. Our calculations also showed that PRPH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. Keeping this in mind we’re going to take a glance at the recent hedge fund action surrounding ProPhase Labs Inc (NASDAQ:PRPH).
Do Hedge Funds Think PRPH Is A Good Stock To Buy Now?
At first quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 300% from the previous quarter. By comparison, 1 hedge funds held shares or bullish call options in PRPH a year ago. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies has the biggest position in ProPhase Labs Inc (NASDAQ:PRPH), worth close to $2.1 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Kamunting Street Capital, led by Allan Teh, holding a $0.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism encompass Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Kamunting Street Capital allocated the biggest weight to ProPhase Labs Inc (NASDAQ:PRPH), around 0.29% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0027 percent of its 13F equity portfolio to PRPH.
As industrywide interest jumped, specific money managers have jumped into ProPhase Labs Inc (NASDAQ:PRPH) headfirst. Kamunting Street Capital, managed by Allan Teh, initiated the most outsized position in ProPhase Labs Inc (NASDAQ:PRPH). Kamunting Street Capital had $0.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter. The following funds were also among the new PRPH investors: Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks similar to ProPhase Labs Inc (NASDAQ:PRPH). These stocks are American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT), Avino Silver & Gold Mines Ltd. (NYSE:ASM), ReWalk Robotics Ltd. (NASDAQ:RWLK), Phunware, Inc. (NASDAQ:PHUN), Marchex, Inc. (NASDAQ:MCHX), Wayside Technology Group, Inc. (NASDAQ:WSTG), and Manning and Napier Inc (NYSE:MN). This group of stocks’ market valuations match PRPH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVCT | 3 | 1243 | -2 |
| ASM | 1 | 281 | 0 |
| RWLK | 4 | 8031 | 0 |
| PHUN | 1 | 42 | 0 |
| MCHX | 6 | 10432 | -1 |
| WSTG | 3 | 10993 | 1 |
| MN | 8 | 14849 | -1 |
| Average | 3.7 | 6553 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.7 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $3 million in PRPH’s case. Manning and Napier Inc (NYSE:MN) is the most popular stock in this table. On the other hand Avino Silver & Gold Mines Ltd. (NYSE:ASM) is the least popular one with only 1 bullish hedge fund positions. ProPhase Labs Inc (NASDAQ:PRPH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PRPH is 59.4. 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately PRPH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PRPH were disappointed as the stock returned -9.2% since the end of March (through 6/11) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.