The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Perficient, Inc. (NASDAQ:PRFT).
Is Perficient, Inc. (NASDAQ:PRFT) a buy, sell, or hold? The best stock pickers are altogether getting less optimistic. The number of long hedge fund bets that are revealed through 13F filings dropped by 1 in recent months. PRFT was in 9 hedge funds’ portfolios at the end of September. There were 10 hedge funds in our database with PRFT holdings at the end of the previous quarter. 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 Investors Real Estate Trust (NYSE:IRET), Leju Holdings Ltd (ADR) (NYSE:LEJU), and Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) to gather more data points.
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
What have hedge funds been doing with Perficient, Inc. (NASDAQ:PRFT)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a 10% decline from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PRFT over the last 5 quarters, which has fallen slightly since peaking at the end of Q1. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, D E Shaw, one of the biggest hedge funds in the world has the most valuable position in Perficient, Inc. (NASDAQ:PRFT), worth close to $2.1 million. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, which holds a $1.4 million position. Remaining hedge funds and institutional investors with similar optimism contain Chuck Royce’s Royce & Associates, Cliff Asness’ AQR Capital Management, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-micro-cap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cut their entire stakes in the stock during the third quarter. At the top of the heap, Israel Englander’s Millennium Management cut the largest investment of the “upper crust” of funds monitored by Insider Monkey, worth about $2 million in stock, and Jim Simons’ Renaissance Technologies was right behind this move, as the fund cut about $0.9 million worth of shares.
Let’s also examine hedge fund activity in other stocks similar to Perficient, Inc. (NASDAQ:PRFT). These stocks are Investors Real Estate Trust (NYSE:IRET), Leju Holdings Ltd (ADR) (NYSE:LEJU), Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), and Douglas Dynamics Inc (NYSE:PLOW). This group of stocks’ market valuations resemble PRFT’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $8 million in PRFT’s case. Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is the most popular stock in this table. On the other hand Leju Holdings Ltd (ADR) (NYSE:LEJU) is the least popular one with only 4 bullish hedge fund positions. Perficient, Inc. (NASDAQ:PRFT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VNDA might be a better candidate to consider taking a long position in.