PAREXEL International Corporation (PRXL): Are Hedge Funds Right About This Stock?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Is PAREXEL International Corporation (NASDAQ:PRXL) an outstanding investment right now? The best stock pickers are really turning bullish. The number of long hedge fund positions that are disclosed in regulatory 13F filings went up by 2 lately. PRXL was in 19 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with PRXL positions at the end of the previous quarter. At the end of this article we will also compare PRXL to other stocks including Acacia Communications, Inc. (NASDAQ:ACIA), Trinity Industries, Inc. (NYSE:TRN), and The Hain Celestial Group, Inc. (NASDAQ:HAIN) to get a better sense of its popularity.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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How have hedgies been trading PAREXEL International Corporation (NASDAQ:PRXL)?

Heading into the fourth quarter of 2016, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 12% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards PRXL over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Fisher Asset Management, led by Ken Fisher, holds the number one position in PAREXEL International Corporation (NASDAQ:PRXL). Fisher Asset Management has a $160.6 million position in the stock. Sitting at the No. 2 spot is JHL Capital Group, led by James H. Litinsky, which holds a $32.6 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions contain Anand Parekh’s Alyeska Investment Group, Chuck Royce’s Royce & Associates and Ferdinand Groos’ Cryder Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Balyasny Asset Management, led by Dmitry Balyasny, established the most valuable position in PAREXEL International Corporation (NASDAQ:PRXL). Balyasny Asset Management had $6.6 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $4.5 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Neil Chriss’ Hutchin Hill Capital, and Glenn W. Welling’s Engaged Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as PAREXEL International Corporation (NASDAQ:PRXL) but similarly valued. These stocks are Acacia Communications, Inc. (NASDAQ:ACIA), Trinity Industries, Inc. (NYSE:TRN), The Hain Celestial Group, Inc. (NASDAQ:HAIN), and Crane Co. (NYSE:CR). All of these stocks’ market caps are similar to PRXL’s market cap.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $322 million. That figure was $303 million in PRXL’s case. The Hain Celestial Group, Inc. (NASDAQ:HAIN) is the most popular stock in this table. On the other hand Acacia Communications, Inc. (NASDAQ:ACIA) is the least popular one with only 8 bullish hedge fund positions. PAREXEL International Corporation (NASDAQ:PRXL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HAIN might be a better candidate to consider taking a long position in.

Disclosure: None