Hedge Funds Have Never Been This Bullish On HMS Holdings Corp. (HMSY)
A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31, so let’s proceed with the discussion of the hedge fund sentiment on HMS Holdings Corp. (NASDAQ:HMSY).
Is HMS Holdings Corp. (NASDAQ:HMSY) a bargain? Money managers are getting more bullish. The number of bullish hedge fund positions moved up by 4 lately. Our calculations also showed that hmsy isn't among the 30 most popular stocks among hedge funds. HMSY was in 26 hedge funds' portfolios at the end of the first quarter of 2019. There were 22 hedge funds in our database with HMSY holdings at the end of the previous quarter.
In today’s marketplace there are several indicators stock traders use to value their holdings. Two of the most useful indicators are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite investment managers can trounce the market by a healthy margin (see the details here).
Let's analyze the key hedge fund action encompassing HMS Holdings Corp. (NASDAQ:HMSY).
Hedge fund activity in HMS Holdings Corp. (NASDAQ:HMSY)
Heading into the second quarter of 2019, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the fourth quarter of 2018. On the other hand, there were a total of 11 hedge funds with a bullish position in HMSY a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
The largest stake in HMS Holdings Corp. (NASDAQ:HMSY) was held by D E Shaw, which reported holding $32.9 million worth of stock at the end of March. It was followed by Citadel Investment Group with a $26.6 million position. Other investors bullish on the company included Renaissance Technologies, Point72 Asset Management, and AQR Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. PEAK6 Capital Management, managed by Matthew Hulsizer, initiated the most valuable position in HMS Holdings Corp. (NASDAQ:HMSY). PEAK6 Capital Management had $0.9 million invested in the company at the end of the quarter. Ronald Hua's Qtron Investments also initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Louis Navellier's Navellier & Associates, Michael Platt and William Reeves's BlueCrest Capital Mgmt., and Jeffrey Talpins's Element Capital Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as HMS Holdings Corp. (NASDAQ:HMSY) but similarly valued. We will take a look at Cogent Communications Holdings, Inc. (NASDAQ:CCOI), Switch, Inc. (NYSE:SWCH), John Wiley & Sons Inc (NYSE:JW), and Kosmos Energy Ltd (NYSE:KOS). This group of stocks' market values match HMSY's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CCOI,19,264412,2 SWCH,16,175891,2 JW,17,77690,0 KOS,18,118384,4 Average,17.5,159094,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $179 million in HMSY's case. Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is the most popular stock in this table. On the other hand Switch, Inc. (NYSE:SWCH) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks HMS Holdings Corp. (NASDAQ:HMSY) is more popular among hedge funds. 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. Hedge funds were also right about betting on HMSY as the stock returned 4% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
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