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Is Perficient, Inc. (PRFT) A Good Stock To Buy?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Is Perficient, Inc. (NASDAQ:PRFT) a good investment now? The best stock pickers are in a bullish mood. The number of bullish hedge fund bets increased by 3 recently. At the end of this article we will also compare PRFT to other stocks including Newport Corporation (NASDAQ:NEWP), Marten Transport, Ltd (NASDAQ:MRTN), and Del Taco Restaurants Inc (NASDAQ:TACO) to get a better sense of its popularity.

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If you’d ask most stock holders, hedge funds are assumed to be unimportant, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, Our researchers choose to focus on the bigwigs of this group, around 700 funds. These investment experts direct most of the hedge fund industry’s total capital, and by shadowing their highest performing picks, Insider Monkey has brought to light many investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, let’s analyze the latest action encompassing Perficient, Inc. (NASDAQ:PRFT).

What have hedge funds been doing with Perficient, Inc. (NASDAQ:PRFT)?

Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Perficient, Inc. (NASDAQ:PRFT). Royce & Associates has a $3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which holds a $1.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions encompass John Overdeck and David Siegel’s Two Sigma Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Israel Englander’s Millennium Management.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the most valuable position in Perficient, Inc. (NASDAQ:PRFT). Two Sigma Advisors had $1.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Mark Coe’s Coe Capital Management and Neil Chriss’s Hutchin Hill Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Perficient, Inc. (NASDAQ:PRFT) but similarly valued. These stocks are Newport Corporation (NASDAQ:NEWP), Marten Transport, Ltd (NASDAQ:MRTN), Del Taco Restaurants Inc (NASDAQ:TACO), and Agree Realty Corporation (NYSE:ADC). This group of stocks’ market valuations match PRFT’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NEWP 20 85174 2
MRTN 16 28821 0
TACO 24 161012 2
ADC 7 16159 -4

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $9 million in PRFT’s case. Del Taco Restaurants Inc (NASDAQ:TACO) is the most popular stock in this table, while the least popular one is Agree Realty Corporation (NYSE:ADC). Although, Perficient, Inc. (NASDAQ:PRFT) is not the least popular stock in this group, hedge fund interest is still below average. This may indicate that it is a stock not worth considering; therefore, we’d rather spend our time researching stocks that hedge funds are piling on. In this case, TACO might be a better alternative.

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