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Here’s What Hedge Funds Think About The Providence Service Corporation (PRSC)

Reymerlyn Martin

Is The Providence Service Corporation (NASDAQ:PRSC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is The Providence Service Corporation (NASDAQ:PRSC) worth your attention right now? Money managers are betting on the stock. The number of bullish hedge fund positions improved by 2 recently. Our calculations also showed that PRSC isn't among the 30 most popular stocks among hedge funds.

In the financial world there are a lot of tools investors use to appraise publicly traded companies. A duo of the most underrated tools are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the elite money managers can outclass the broader indices by a significant amount (see the details here).

AQR CAPITAL MANAGEMENT

Let's check out the fresh hedge fund action encompassing The Providence Service Corporation (NASDAQ:PRSC).

How have hedgies been trading The Providence Service Corporation (NASDAQ:PRSC)?

At the end of the fourth quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in PRSC over the last 14 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

PRSC_may2019

More specifically, Coliseum Capital was the largest shareholder of The Providence Service Corporation (NASDAQ:PRSC), with a stake worth $73.5 million reported as of the end of December. Trailing Coliseum Capital was Renaissance Technologies, which amassed a stake valued at $58.4 million. Alta Fundamental Advisers, Prosight Capital, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls' herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in The Providence Service Corporation (NASDAQ:PRSC). Marshall Wace LLP had $0.4 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle's Springbok Capital also made a $0 million investment in the stock during the quarter.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as The Providence Service Corporation (NASDAQ:PRSC) but similarly valued. We will take a look at Partner Communications Company Ltd (NASDAQ:PTNR), Meta Financial Group Inc. (NASDAQ:CASH), CBTX, Inc. (NASDAQ:CBTX), and Urstadt Biddle Properties Inc (NYSE:UBA). All of these stocks' market caps match PRSC's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PTNR,2,12760,0 CASH,13,69041,-2 CBTX,8,25322,0 UBA,7,25975,-1 Average,7.5,33275,-0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $157 million in PRSC's case. Meta Financial Group Inc. (NASDAQ:CASH) is the most popular stock in this table. On the other hand Partner Communications Company Ltd (NASDAQ:PTNR) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks The Providence Service Corporation (NASDAQ:PRSC) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately PRSC wasn't nearly as popular as these 15 stock and hedge funds that were betting on PRSC were disappointed as the stock returned 4.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

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

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