Is Perspecta (PRSP) a Smart Long-term Buy?

Clark Street Value is bullish on Perspecta Inc. (NYSE:PRSP) stock. Clark Street Value is an individual investor that is focused on finding value and special situation investments. Perspecta Inc. (NYSE:PRSP) is a government services company. In the last one year, Perspecta Inc. (NYSE:PRSP) stock lost 11.4% and on January 4th it had a closing price of $23.47.

Clark Street Value said that it sold its position in Perspecta Inc. (NYSE:PRSP) stock last year in Spring. However, since then activist fund JANA Partners is betting on Perspecta Inc. (NYSE:PRSP) stock after the company “passed its 2 year safe harbor post-spin making it able to be acquired without jeopardizing the tax free spinoff.” In November 2020, Bloomberg reported that Perspecta had hired advisors to pursue a sale. Clark Street Value added, “The original thesis was that PRSP could be a replay of CRSA (also a DXC government services spinoff) which was sold for 12x EBITDA to General Dynamics, that thesis might still hold, 12x PRSP’s ~$600MM EBITDA would be approximately $30 per share.”

Iakov Filimonov/

Earlier this month, we published an article revealing that Perspecta Inc. (NYSE:PRSP) was one of the 10 best defense stocks to buy right now. The defense industry apparently remains unwavered in the midst of the coronavirus crisis. Defense budgets are expected to expand worldwide and analysts believe defense stocks are ripe for investment to take profits in 2021 and beyond.

In Q3 2020, the number of bullish hedge fund positions on Perspecta Inc. (NYSE:PRSP) stock decreased by about 22% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Perspecta’s growth potential. Our calculations showed that Perspecta Inc. (NYSE:PRSP) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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 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:

Disclosure: None. This article is originally published at Insider Monkey.