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Is Progress Software Corporation (PRGS) Going To Burn These Hedge Funds ?

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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Progress Software Corporation (NASDAQ:PRGS) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Progress Software Corporation (NASDAQ:PRGS) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 24 hedge funds’ portfolios at the end of June. At the end of this article we will also compare PRGS to other stocks including Tower Semiconductor Ltd. (NASDAQ:TSEM), Goosehead Insurance, Inc. (NASDAQ:GSHD), and Portola Pharmaceuticals Inc (NASDAQ:PTLA) to get a better sense of its popularity.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most shareholders, hedge funds are perceived as worthless, old investment vehicles of years past. While there are more than 8000 funds trading today, Our researchers hone in on the elite of this club, around 750 funds. It is estimated that this group of investors direct the majority of the hedge fund industry’s total asset base, and by keeping an eye on their matchless stock picks, Insider Monkey has unsheathed numerous investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

PRGS_oct2019

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to go over the fresh hedge fund action regarding Progress Software Corporation (NASDAQ:PRGS).

How are hedge funds trading Progress Software Corporation (NASDAQ:PRGS)?

Heading into the third quarter of 2019, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the first quarter of 2019. On the other hand, there were a total of 25 hedge funds with a bullish position in PRGS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Bruce Kovner, Caxton Associates LP

The largest stake in Progress Software Corporation (NASDAQ:PRGS) was held by GLG Partners, which reported holding $73.4 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $59.3 million position. Other investors bullish on the company included Fisher Asset Management, D E Shaw, and Arrowstreet Capital.

Since Progress Software Corporation (NASDAQ:PRGS) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there exists a select few money managers who sold off their full holdings heading into Q3. It’s worth mentioning that Benjamin A. Smith’s Laurion Capital Management dropped the largest position of the 750 funds monitored by Insider Monkey, totaling close to $1.5 million in stock, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital was right behind this move, as the fund cut about $0.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Progress Software Corporation (NASDAQ:PRGS) but similarly valued. We will take a look at Tower Semiconductor Ltd. (NASDAQ:TSEM), Goosehead Insurance, Inc. (NASDAQ:GSHD), Portola Pharmaceuticals Inc (NASDAQ:PTLA), and PennyMac Financial Services Inc (NYSE:PFSI). This group of stocks’ market valuations are similar to PRGS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TSEM 11 236662 -1
GSHD 7 30448 3
PTLA 18 263264 -2
PFSI 16 104584 0
Average 13 158740 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $268 million in PRGS’s case. Portola Pharmaceuticals Inc (NASDAQ:PTLA) is the most popular stock in this table. On the other hand Goosehead Insurance, Inc. (NASDAQ:GSHD) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Progress Software Corporation (NASDAQ:PRGS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately PRGS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PRGS were disappointed as the stock returned -12.4% during the third quarter 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 many of these stocks already outperformed the market in Q3.

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

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