The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Perficient, Inc. (NASDAQ:PRFT) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Hedge fund interest in Perficient, Inc. (NASDAQ:PRFT) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that PRFT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as BrightView Holdings, Inc. (NYSE:BV), Middlesex Water Company (NASDAQ:MSEX), and Fresh Del Monte Produce Inc (NYSE:FDP) to gather more data points. Our calculations also showed that PRFT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. We are also checking out this lithium company which could benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Keeping this in mind we're going to take a glance at the latest hedge fund action surrounding Perficient, Inc. (NASDAQ:PRFT).
How have hedgies been trading Perficient, Inc. (NASDAQ:PRFT)?
Heading into the third quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards PRFT over the last 20 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.
Among these funds, GLG Partners held the most valuable stake in Perficient, Inc. (NASDAQ:PRFT), which was worth $11.2 million at the end of the third quarter. On the second spot was Driehaus Capital which amassed $8.7 million worth of shares. Blue Grotto Capital, Millennium Management, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Blue Grotto Capital allocated the biggest weight to Perficient, Inc. (NASDAQ:PRFT), around 4.35% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, setting aside 0.74 percent of its 13F equity portfolio to PRFT.
Seeing as Perficient, Inc. (NASDAQ:PRFT) has witnessed bearish sentiment from the smart money, it's safe to say that there is a sect of money managers that elected to cut their entire stakes in the second quarter. Interestingly, Dmitry Balyasny's Balyasny Asset Management cut the biggest investment of the "upper crust" of funds monitored by Insider Monkey, worth an estimated $2.3 million in stock. Mark Broach's fund, Manatuck Hill Partners, also said goodbye to its stock, about $1.8 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Perficient, Inc. (NASDAQ:PRFT) but similarly valued. These stocks are BrightView Holdings, Inc. (NYSE:BV), Middlesex Water Company (NASDAQ:MSEX), Fresh Del Monte Produce Inc (NYSE:FDP), Atrion Corporation (NASDAQ:ATRI), Transocean Ltd (NYSE:RIG), HeadHunter Group PLC (NASDAQ:HHR), and Genworth Financial Inc (NYSE:GNW). This group of stocks' market values are closest to PRFT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BV,18,173980,10 MSEX,5,46852,-2 FDP,11,28532,5 ATRI,12,64691,0 RIG,21,59976,0 HHR,5,36640,0 GNW,36,164489,4 Average,15.4,82166,2.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $61 million in PRFT's case. Genworth Financial Inc (NYSE:GNW) is the most popular stock in this table. On the other hand Middlesex Water Company (NASDAQ:MSEX) is the least popular one with only 5 bullish hedge fund positions. Perficient, Inc. (NASDAQ:PRFT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PRFT is 58.2. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of third quarter and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on PRFT as the stock returned 19.5% during Q3 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.