Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Primoris Services Corp (NASDAQ:PRIM), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Primoris Services Corp (NASDAQ:PRIM) an exceptional stock to buy now? The best stock pickers are getting more bullish. The number of bullish hedge fund bets moved up by 1 lately. Our calculations also showed that PRIM isn’t among the 30 most popular stocks among hedge funds.
If you’d ask most market participants, hedge funds are assumed to be underperforming, outdated investment tools of the past. While there are greater than 8000 funds in operation today, We hone in on the upper echelon of this club, around 750 funds. These money managers direct the lion’s share of all hedge funds’ total asset base, and by following their top stock picks, Insider Monkey has revealed a few investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let’s analyze the latest hedge fund action encompassing Primoris Services Corp (NASDAQ:PRIM).
How have hedgies been trading Primoris Services Corp (NASDAQ:PRIM)?
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PRIM over the last 15 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Primoris Services Corp (NASDAQ:PRIM), which was worth $7.1 million at the end of the first quarter. On the second spot was Divisar Capital which amassed $5.6 million worth of shares. Moreover, Citadel Investment Group, Renaissance Technologies, and Two Sigma Advisors were also bullish on Primoris Services Corp (NASDAQ:PRIM), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most valuable position in Primoris Services Corp (NASDAQ:PRIM). Marshall Wace LLP had $0.6 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $0.3 million position during the quarter. The only other fund with a brand new PRIM position is Mike Vranos’s Ellington.
Let’s now review hedge fund activity in other stocks similar to Primoris Services Corp (NASDAQ:PRIM). These stocks are Apollo Investment Corp. (NASDAQ:AINV), Geopark Ltd (NYSE:GPRK), Endurance International Group Holdings Inc (NASDAQ:EIGI), and Lindsay Corporation (NYSE:LNN). This group of stocks’ market values are similar to PRIM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AINV | 9 | 26169 | -6 |
| GPRK | 13 | 88491 | 0 |
| EIGI | 11 | 125661 | -7 |
| LNN | 7 | 212046 | -4 |
| Average | 10 | 113092 | -4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $113 million. That figure was $29 million in PRIM’s case. Geopark Ltd (NYSE:GPRK) is the most popular stock in this table. On the other hand Lindsay Corporation (NYSE:LNN) is the least popular one with only 7 bullish hedge fund positions. Primoris Services Corp (NASDAQ:PRIM) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately PRIM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PRIM investors were disappointed as the stock returned -5.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
