Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts, usually don't make them change their opinion towards a company. This time it may be different. During the fourth quarter of 2018 we observed increased volatility and small-cap stocks underperformed the market. Things completely reversed during the first quarter. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Accenture Plc (NYSE:ACN) to find out whether it was one of their high conviction long-term ideas.
Accenture Plc (NYSE:ACN) was in 40 hedge funds' portfolios at the end of the first quarter of 2019. ACN investors should be aware of an increase in support from the world's most elite money managers of late. There were 34 hedge funds in our database with ACN holdings at the end of the previous quarter. Our calculations also showed that ACN isn't among the 30 most popular stocks among hedge funds.
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We're going to go over the recent hedge fund action encompassing Accenture Plc (NYSE:ACN).
How are hedge funds trading Accenture Plc (NYSE:ACN)?
At Q1's end, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards ACN over the last 15 quarters. With the smart money's sentiment swirling, there exists an "upper tier" of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
The largest stake in Accenture Plc (NYSE:ACN) was held by AQR Capital Management, which reported holding $272.6 million worth of stock at the end of March. It was followed by Praesidium Investment Management Company with a $163.7 million position. Other investors bullish on the company included Adage Capital Management, Citadel Investment Group, and Intermede Investment Partners.
As aggregate interest increased, key hedge funds were leading the bulls' herd. Intermede Investment Partners, managed by Barry Dargan, assembled the largest position in Accenture Plc (NYSE:ACN). Intermede Investment Partners had $60.3 million invested in the company at the end of the quarter. Michael Kharitonov and Jon David McAuliffe's Voleon Capital also initiated a $14.1 million position during the quarter. The other funds with brand new ACN positions are Matthew Tewksbury's Stevens Capital Management, Ray Dalio's Bridgewater Associates, and John Brandmeyer's Cognios Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Accenture Plc (NYSE:ACN) but similarly valued. These stocks are United Technologies Corporation (NYSE:UTX), Sanofi (NASDAQ:SNY), Thermo Fisher Scientific Inc. (NYSE:TMO), and NVIDIA Corporation (NASDAQ:NVDA). This group of stocks' market caps resemble ACN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UTX,59,6558837,-5 SNY,26,860101,3 TMO,68,4435544,1 NVDA,43,1595434,2 Average,49,3362479,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 49 hedge funds with bullish positions and the average amount invested in these stocks was $3362 million. That figure was $977 million in ACN's case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Sanofi (NASDAQ:SNY) is the least popular one with only 26 bullish hedge fund positions. Accenture Plc (NYSE:ACN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on ACN as the stock returned 2.4% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.