Pra Group Inc (PRAA): Are Hedge Funds Right About This Stock?

Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the third quarter. Among them, Valeant and Micron ranked among the top 30 picks and both lost around 20%. Citigroup, which was the third most popular stock, lost 10% amid uncertainty regarding the interest rates. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.

Pra Group Inc (NASDAQ:PRAA) has experienced a decrease in hedge fund interest recently. PRAA was in 16 hedge funds’ portfolios at the end of the third quarter of 2015. There were 18 hedge funds in our database with PRAA positions at the end of the previous quarter. 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 Helen of Troy Limited (NASDAQ:HELE), HomeAway, Inc. (NASDAQ:AWAY), and Impax Laboratories Inc (NASDAQ:IPXL) to gather more data points.

Now, we’re going to analyze the latest action regarding Pra Group Inc (NASDAQ:PRAA).

What have hedge funds been doing with Pra Group Inc (NASDAQ:PRAA)?

At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the second quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Jonathan Bloomberg’s BloombergSen has the most valuable position in Pra Group Inc (NASDAQ:PRAA), worth close to $122 million, accounting for 6.9% of its total 13F portfolio. Sitting at the No. 2 spot is Alyeska Investment Group, led by Anand Parekh, holding a $59.3 million position; 0.7% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish consist of Lee Munder’s Lee Munder Capital Group, Ken Griffin’s Citadel Investment Group and Bill Miller’s Legg Mason Capital Management.