The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of PRGX Global Inc (NASDAQ:PRGX).
Is PRGX Global Inc (NASDAQ:PRGX) a sound investment now? Money managers are in a bullish mood. The number of long hedge fund positions moved up by 2 in recent months. Our calculations also showed that PRGX isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to analyze the fresh hedge fund action encompassing PRGX Global Inc (NASDAQ:PRGX).
Hedge fund activity in PRGX Global Inc (NASDAQ:PRGX)
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PRGX over the last 18 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
More specifically, Headlands Capital was the largest shareholder of PRGX Global Inc (NASDAQ:PRGX), with a stake worth $8.3 million reported as of the end of September. Trailing Headlands Capital was Becker Drapkin Management, which amassed a stake valued at $5.7 million. Renaissance Technologies, North Run Capital, and Trellus Management Company 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 Headlands Capital allocated the biggest weight to PRGX Global Inc (NASDAQ:PRGX), around 8.88% of its 13F portfolio. Becker Drapkin Management is also relatively very bullish on the stock, setting aside 8.18 percent of its 13F equity portfolio to PRGX.
Consequently, some big names have jumped into PRGX Global Inc (NASDAQ:PRGX) headfirst. North Run Capital, managed by Thomas Ellis and Todd Hammer, created the most valuable position in PRGX Global Inc (NASDAQ:PRGX). North Run Capital had $1.8 million invested in the company at the end of the quarter. Adam Usdan’s Trellus Management Company also made a $0.8 million investment in the stock during the quarter. The following funds were also among the new PRGX investors: Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
Let’s also examine hedge fund activity in other stocks similar to PRGX Global Inc (NASDAQ:PRGX). These stocks are Celcuity Inc. (NASDAQ:CELC), Akerna Corp. (NASDAQ:KERN), Ampio Pharmaceuticals, Inc. (NYSE:AMPE), and Taseko Mines Limited (NYSE:TGB). This group of stocks’ market caps are similar to PRGX’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.25 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $21 million in PRGX’s case. Taseko Mines Limited (NYSE:TGB) is the most popular stock in this table. On the other hand Ampio Pharmaceuticals, Inc. (NYSE:AMPE) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks PRGX Global Inc (NASDAQ:PRGX) is more popular among hedge funds. 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 returned 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on PRGX as the stock returned 39.3% so far in Q2 (through June 17th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.