We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Manhattan Associates, Inc. (NASDAQ:MANH) based on that data.
Is Manhattan Associates, Inc. (NASDAQ:MANH) a bargain? Prominent investors are turning less bullish. The number of long hedge fund bets dropped by 4 lately. Our calculations also showed that MANH 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). MANH was in 20 hedge funds' portfolios at the end of March. There were 24 hedge funds in our database with MANH positions at the end of the previous quarter. 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 58 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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_844243" align="aligncenter" width="400"] Donald Sussman of Paloma Partners[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to analyze the recent hedge fund action regarding Manhattan Associates, Inc. (NASDAQ:MANH).
What does smart money think about Manhattan Associates, Inc. (NASDAQ:MANH)?
Heading into the second quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the fourth quarter of 2019. On the other hand, there were a total of 18 hedge funds with a bullish position in MANH a year ago. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Cliff Asness's AQR Capital Management has the largest position in Manhattan Associates, Inc. (NASDAQ:MANH), worth close to $41.3 million, amounting to 0.1% of its total 13F portfolio. The second most bullish fund manager is Royce & Associates, managed by Chuck Royce, which holds a $35 million position; 0.5% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions contain Robert G. Moses's RGM Capital, Renaissance Technologies and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position RGM Capital allocated the biggest weight to Manhattan Associates, Inc. (NASDAQ:MANH), around 2.51% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.48 percent of its 13F equity portfolio to MANH.
Since Manhattan Associates, Inc. (NASDAQ:MANH) has experienced declining sentiment from hedge fund managers, it's safe to say that there was a specific group of fund managers that elected to cut their full holdings by the end of the first quarter. Intriguingly, Israel Englander's Millennium Management said goodbye to the largest investment of the "upper crust" of funds monitored by Insider Monkey, worth close to $12.5 million in stock. Sander Gerber's fund, Hudson Bay Capital Management, also dumped its stock, about $4.5 million worth. These moves are important to note, as total hedge fund interest dropped by 4 funds by the end of the first quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Manhattan Associates, Inc. (NASDAQ:MANH) but similarly valued. These stocks are LG Display Co Ltd. (NYSE:LPL), Nevro Corp (NYSE:NVRO), B2Gold Corp (NYSE:BTG), and Nektar Therapeutics (NASDAQ:NKTR). All of these stocks' market caps resemble MANH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LPL,4,4761,1 NVRO,31,694464,-2 BTG,19,228596,2 NKTR,17,198202,-9 Average,17.75,281506,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $282 million. That figure was $200 million in MANH's case. Nevro Corp (NYSE:NVRO) is the most popular stock in this table. On the other hand LG Display Co Ltd. (NYSE:LPL) is the least popular one with only 4 bullish hedge fund positions. Manhattan Associates, Inc. (NASDAQ:MANH) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on MANH as the stock returned 77% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.