The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Primoris Services Corp (NASDAQ:PRIM).
Is Primoris Services Corp (NASDAQ:PRIM) a worthy investment now? The smart money is getting more bullish. The number of long hedge fund positions inched up by 2 in recent months. Our calculations also showed that PRIM isn't among the 30 most popular stocks among hedge funds (see the video below). PRIM was in 12 hedge funds' portfolios at the end of the second quarter of 2019. There were 10 hedge funds in our database with PRIM positions at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most market participants, hedge funds are seen as underperforming, old financial vehicles of years past. While there are greater than 8000 funds in operation today, We choose to focus on the masters of this club, around 750 funds. These hedge fund managers command the lion's share of the hedge fund industry's total asset base, and by keeping track of their best stock picks, Insider Monkey has found various investment strategies that have historically outstripped Mr. Market. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a look at the recent hedge fund action regarding Primoris Services Corp (NASDAQ:PRIM).
How have hedgies been trading Primoris Services Corp (NASDAQ:PRIM)?
At the end of the second quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from one quarter earlier. By comparison, 11 hedge funds held shares or bullish call options in PRIM a year ago. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
The largest stake in Primoris Services Corp (NASDAQ:PRIM) was held by Divisar Capital, which reported holding $6.5 million worth of stock at the end of March. It was followed by Royce & Associates with a $5.5 million position. Other investors bullish on the company included Renaissance Technologies, Citadel Investment Group, and Millennium Management.
As aggregate interest increased, key money managers have jumped into Primoris Services Corp (NASDAQ:PRIM) headfirst. Royce & Associates, managed by Chuck Royce, initiated the most outsized position in Primoris Services Corp (NASDAQ:PRIM). Royce & Associates had $5.5 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron's Algert Coldiron Investors also initiated a $1 million position during the quarter. The other funds with brand new PRIM positions are Roger Ibbotson's Zebra Capital Management and William Harnisch's Peconic Partners LLC.
Let's check out hedge fund activity in other stocks similar to Primoris Services Corp (NASDAQ:PRIM). We will take a look at Encore Capital Group, Inc. (NASDAQ:ECPG), Republic Bancorp, Inc. (NASDAQ:RBCAA), Cango Inc. (NYSE:CANG), and Piper Jaffray Companies (NYSE:PJC). This group of stocks' market values are closest to PRIM's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ECPG,8,63507,-6 RBCAA,6,17134,-1 CANG,1,414,-1 PJC,9,50094,1 Average,6,32787,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $31 million in PRIM's case. Piper Jaffray Companies (NYSE:PJC) is the most popular stock in this table. On the other hand Cango Inc. (NYSE:CANG) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Primoris Services Corp (NASDAQ:PRIM) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately PRIM wasn't nearly as popular as these 20 stocks and hedge funds that were betting on PRIM were disappointed as the stock returned -6% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
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