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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of ProSight Global, Inc. (NYSE:PROS).
ProSight Global, Inc. (NYSE:PROS) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. 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 TPG RE Finance Trust, Inc. (NYSE:TRTX), Amyris Inc (NASDAQ:AMRS), and Arrow Financial Corporation (NASDAQ:AROW) to gather more data points. Our calculations also showed that PROS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are dozens of metrics shareholders use to analyze their stock investments. A pair of the less utilized metrics are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the best money managers can trounce the market by a healthy margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to view the fresh hedge fund action surrounding ProSight Global, Inc. (NYSE:PROS).
What does smart money think about ProSight Global, Inc. (NYSE:PROS)?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PROS over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the biggest position in ProSight Global, Inc. (NYSE:PROS). Adage Capital Management has a $2.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Citadel Investment Group, led by Ken Griffin, holding a $0.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Renaissance Technologies and . In terms of the portfolio weights assigned to each position Adage Capital Management allocated the biggest weight to ProSight Global, Inc. (NYSE:PROS), around 0.01% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, setting aside 0.0006 percent of its 13F equity portfolio to PROS.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Renaissance Technologies).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as ProSight Global, Inc. (NYSE:PROS) but similarly valued. We will take a look at TPG RE Finance Trust, Inc. (NYSE:TRTX), Amyris Inc (NASDAQ:AMRS), Arrow Financial Corporation (NASDAQ:AROW), and Huize Holding Limited (NASDAQ:HUIZ). This group of stocks’ market values are closest to PROS’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $4 million in PROS’s case. TPG RE Finance Trust, Inc. (NYSE:TRTX) is the most popular stock in this table. On the other hand Huize Holding Limited (NASDAQ:HUIZ) is the least popular one with only 1 bullish hedge fund positions. ProSight Global, Inc. (NYSE:PROS) 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately PROS wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); PROS investors were disappointed as the stock returned -9.1% during the second 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 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.