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Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 817 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Progyny, Inc. (NASDAQ:PGNY).
Is PGNY a good stock to buy now? Progyny, Inc. (NASDAQ:PGNY) investors should pay attention to an increase in activity from the world's largest hedge funds of late. Progyny, Inc. (NASDAQ:PGNY) was in 20 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 19 hedge funds in our database with PGNY holdings at the end of June. Our calculations also showed that PGNY isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Jim Simons founder of Renaissance Technologies
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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. With all of this in mind let's take a peek at the new hedge fund action encompassing Progyny, Inc. (NASDAQ:PGNY).
Do Hedge Funds Think PGNY Is A Good Stock To Buy Now?
At third quarter's end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PGNY over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, OrbiMed Advisors held the most valuable stake in Progyny, Inc. (NASDAQ:PGNY), which was worth $49.3 million at the end of the third quarter. On the second spot was General Equity Partners which amassed $15.3 million worth of shares. Sabrepoint Capital, Islet Management, and Osterweis Capital Management 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 General Equity Partners allocated the biggest weight to Progyny, Inc. (NASDAQ:PGNY), around 8.37% of its 13F portfolio. Sabrepoint Capital is also relatively very bullish on the stock, setting aside 4.2 percent of its 13F equity portfolio to PGNY.
As one would reasonably expect, some big names were breaking ground themselves. General Equity Partners, managed by Andrew Bellas, created the most valuable position in Progyny, Inc. (NASDAQ:PGNY). General Equity Partners had $15.3 million invested in the company at the end of the quarter. George Baxter's Sabrepoint Capital also made a $11.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Joseph Samuels's Islet Management, Renaissance Technologies, and Jay Genzer's Thames Capital Management.
Let's go over hedge fund activity in other stocks similar to Progyny, Inc. (NASDAQ:PGNY). We will take a look at Chart Industries, Inc. (NASDAQ:GTLS), Seres Therapeutics Inc (NASDAQ:MCRB), StepStone Group Inc. (NASDAQ:STEP), Ping Identity Holding Corp. (NYSE:PING), Vaxcyte, Inc. (NASDAQ:PCVX), Vonage Holdings Corp. (NASDAQ:VG), and Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB). All of these stocks' market caps are similar to PGNY's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GTLS,20,223347,-2 MCRB,12,190096,7 STEP,15,83624,15 PING,11,73051,-4 PCVX,10,473971,-2 VG,36,368753,6 HOMB,14,32750,0 Average,16.9,206513,2.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.9 hedge funds with bullish positions and the average amount invested in these stocks was $207 million. That figure was $117 million in PGNY's case. Vonage Holdings Corp. (NASDAQ:VG) is the most popular stock in this table. On the other hand Vaxcyte, Inc. (NASDAQ:PCVX) is the least popular one with only 10 bullish hedge fund positions. Progyny, Inc. (NASDAQ:PGNY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PGNY is 55.2. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on PGNY as the stock returned 37.9% since the end of Q3 (through 12/14) 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.