The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded 51job, Inc. (NASDAQ:JOBS) based on those filings.
51job, Inc. (NASDAQ:JOBS) shareholders have witnessed a decrease in enthusiasm from smart money of late. Our calculations also showed that JOBS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_26335" align="alignnone" width="600"] Ken Fisher of Fisher Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's go over the key hedge fund action regarding 51job, Inc. (NASDAQ:JOBS).
Hedge fund activity in 51job, Inc. (NASDAQ:JOBS)
Heading into the fourth quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in JOBS a year ago. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Sensato Capital Management, managed by Ernest Chow and Jonathan Howe, holds the most valuable position in 51job, Inc. (NASDAQ:JOBS). Sensato Capital Management has a $6.6 million position in the stock, comprising 2.5% of its 13F portfolio. On Sensato Capital Management's heels is Ken Fisher of Fisher Asset Management, with a $6.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions encompass Fang Zheng's Keywise Capital Management, Ray Dalio's Bridgewater Associates and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Sensato Capital Management allocated the biggest weight to 51job, Inc. (NASDAQ:JOBS), around 2.53% of its 13F portfolio. Keywise Capital Management is also relatively very bullish on the stock, earmarking 1.08 percent of its 13F equity portfolio to JOBS.
Due to the fact that 51job, Inc. (NASDAQ:JOBS) has faced falling interest from the smart money, it's easy to see that there exists a select few hedgies that slashed their entire stakes in the third quarter. It's worth mentioning that Hugh Sloane's Sloane Robinson Investment Management cut the largest position of the "upper crust" of funds monitored by Insider Monkey, totaling about $3.6 million in stock, and Simon Sadler's Segantii Capital was right behind this move, as the fund dumped about $0.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the third quarter.
Let's check out hedge fund activity in other stocks similar to 51job, Inc. (NASDAQ:JOBS). We will take a look at United Microelectronics Corp (NYSE:UMC), Flowers Foods, Inc. (NYSE:FLO), Generac Holdings Inc. (NYSE:GNRC), and Teladoc Inc (NYSE:TDOC). This group of stocks' market values match JOBS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UMC,13,97504,1 FLO,28,244376,6 GNRC,30,289728,5 TDOC,17,102048,-1 Average,22,183414,2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $19 million in JOBS's case. Generac Holdings Inc. (NYSE:GNRC) is the most popular stock in this table. On the other hand United Microelectronics Corp (NYSE:UMC) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks 51job, Inc. (NASDAQ:JOBS) is even less popular than UMC. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on JOBS, though not to the same extent, as the stock returned 6.2% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.