With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was PRA Health Sciences Inc (NASDAQ:PRAH).
PRA Health Sciences Inc (NASDAQ:PRAH) was in 35 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. PRAH shareholders have witnessed an increase in enthusiasm from smart money of late. There were 23 hedge funds in our database with PRAH holdings at the end of December. Our calculations also showed that PRAH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Phillip Gross of Adage Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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 go over the fresh hedge fund action surrounding PRA Health Sciences Inc (NASDAQ:PRAH).
Do Hedge Funds Think PRAH Is A Good Stock To Buy Now?
At first quarter’s end, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, a change of 52% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PRAH over the last 23 quarters. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Alec Litowitz and Ross Laser’s Magnetar Capital has the most valuable position in PRA Health Sciences Inc (NASDAQ:PRAH), worth close to $215.1 million, accounting for 2.1% of its total 13F portfolio. The second most bullish fund manager is Alpine Associates, managed by Robert Emil Zoellner, which holds a $193.9 million position; 5.3% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions consist of Matthew Halbower’s Pentwater Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Alpine Associates allocated the biggest weight to PRA Health Sciences Inc (NASDAQ:PRAH), around 5.26% of its 13F portfolio. Magnetar Capital is also relatively very bullish on the stock, setting aside 2.07 percent of its 13F equity portfolio to PRAH.
Consequently, some big names were leading the bulls’ herd. Magnetar Capital, managed by Alec Litowitz and Ross Laser, initiated the biggest position in PRA Health Sciences Inc (NASDAQ:PRAH). Magnetar Capital had $215.1 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also made a $193.9 million investment in the stock during the quarter. The following funds were also among the new PRAH investors: Matthew Halbower’s Pentwater Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and D. E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as PRA Health Sciences Inc (NASDAQ:PRAH) but similarly valued. We will take a look at Gaming and Leisure Properties Inc (NASDAQ:GLPI), Henry Schein, Inc. (NASDAQ:HSIC), Penumbra Inc (NYSE:PEN), American Financial Group, Inc. (NYSE:AFG), MGM Growth Properties LLC (NYSE:MGP), Aspen Technology, Inc. (NASDAQ:AZPN), and Paylocity Holding Corp (NASDAQ:PCTY). This group of stocks’ market values resemble PRAH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GLPI | 28 | 594880 | -5 |
| HSIC | 32 | 1262137 | -1 |
| PEN | 27 | 399617 | 7 |
| AFG | 21 | 191538 | -3 |
| MGP | 34 | 592102 | 5 |
| AZPN | 32 | 1158081 | 3 |
| PCTY | 22 | 539146 | -4 |
| Average | 28 | 676786 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $677 million. That figure was $1066 million in PRAH’s case. MGM Growth Properties LLC (NYSE:MGP) is the most popular stock in this table. On the other hand American Financial Group, Inc. (NYSE:AFG) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks PRA Health Sciences Inc (NASDAQ:PRAH) is more popular among hedge funds. Our overall hedge fund sentiment score for PRAH is 87.6. 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. 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 19.3% in 2021 through June 25th and still managed to beat the market by 4.8 percentage points. Hedge funds were also right about betting on PRAH, though not to the same extent, as the stock returned 10.4% since the end of March (through June 25th) and outperformed the market as well.
Follow Pra Health Sciences Inc. (NASDAQ:PRAH)
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Disclosure: None. This article was originally published at Insider Monkey.
