After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards ProSight Global, Inc. (NYSE:PROS).
ProSight Global, Inc. (NYSE:PROS) shareholders have witnessed an increase in enthusiasm from smart money lately. ProSight Global, Inc. (NYSE:PROS) was in 11 hedge funds’ portfolios at the end of September. The all time high for this statistics is 6. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PROS isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 15 best blue chip stocks 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. Keeping this in mind let’s check out the recent hedge fund action encompassing ProSight Global, Inc. (NYSE:PROS).
Do Hedge Funds Think PROS Is A Good Stock To Buy Now?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 175% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PROS over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked 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 $4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Capital Returns Management, managed by Ron Bobman, which holds a $2.7 million position; the fund has 7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions include Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Capital Returns Management allocated the biggest weight to ProSight Global, Inc. (NYSE:PROS), around 7.01% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, earmarking 0.58 percent of its 13F equity portfolio to PROS.
As one would reasonably expect, specific money managers have jumped into ProSight Global, Inc. (NYSE:PROS) headfirst. Capital Returns Management, managed by Ron Bobman, established the most outsized position in ProSight Global, Inc. (NYSE:PROS). Capital Returns Management had $2.7 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also initiated a $1.3 million position during the quarter. The other funds with brand new PROS positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Roger Ibbotson’s Zebra Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s also examine 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 Enova International Inc (NYSE:ENVA), Clean Energy Fuels Corp (NASDAQ:CLNE), CEL-SCI Corporation (NYSE:CVM), ADTRAN, Inc. (NASDAQ:ADTN), Hawkins, Inc. (NASDAQ:HWKN), Invesco Mortgage Capital Inc (NYSE:IVR), and Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM). All of these stocks’ market caps resemble PROS’s market cap.
|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 11.6 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $10 million in PROS’s case. Enova International Inc (NYSE:ENVA) is the most popular stock in this table. On the other hand CEL-SCI Corporation (NYSE:CVM) is the least popular one with only 5 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. Our overall hedge fund sentiment score for PROS is 56.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on PROS as the stock returned 15.9% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.