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Hedge Funds Are Piling Into ASGN Incorporated (ASGN)

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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards ASGN Incorporated (NYSE:ASGN).

ASGN Incorporated (NYSE:ASGN) has seen an increase in hedge fund sentiment recently. ASGN Incorporated (NYSE:ASGN) was in 20 hedge funds' portfolios at the end of March. The all time high for this statistic is 23. Our calculations also showed that ASGN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Peter Algert of Algert Global

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. With all of this in mind we're going to view the latest hedge fund action regarding ASGN Incorporated (NYSE:ASGN).

Do Hedge Funds Think ASGN Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in ASGN a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in ASGN Incorporated (NYSE:ASGN) was held by Citadel Investment Group, which reported holding $22.9 million worth of stock at the end of December. It was followed by AQR Capital Management with a $16.5 million position. Other investors bullish on the company included Verdad Advisers, Driehaus Capital, and ExodusPoint Capital. In terms of the portfolio weights assigned to each position Verdad Advisers allocated the biggest weight to ASGN Incorporated (NYSE:ASGN), around 3.5% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, earmarking 0.67 percent of its 13F equity portfolio to ASGN.

As one would reasonably expect, specific money managers were leading the bulls' herd. Algert Global, managed by Peter Algert, created the biggest position in ASGN Incorporated (NYSE:ASGN). Algert Global had $1.3 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $1.2 million position during the quarter. The other funds with brand new ASGN positions are Bruce Kovner's Caxton Associates LP, Dmitry Balyasny's Balyasny Asset Management, and Donald Sussman's Paloma Partners.

Let's go over hedge fund activity in other stocks similar to ASGN Incorporated (NYSE:ASGN). These stocks are Flowserve Corporation (NYSE:FLS), Cyberark Software Ltd (NASDAQ:CYBR), Valmont Industries, Inc. (NYSE:VMI), Exponent, Inc. (NASDAQ:EXPO), IDACORP Inc (NYSE:IDA), Amyris Inc (NASDAQ:AMRS), and RLI Corp. (NYSE:RLI). This group of stocks' market values are similar to ASGN's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FLS,29,174239,8 CYBR,32,502899,5 VMI,23,401266,-3 EXPO,17,63144,2 IDA,17,174429,3 AMRS,14,641287,-1 RLI,14,189969,-1 Average,20.9,306748,1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $307 million. That figure was $79 million in ASGN's case. Cyberark Software Ltd (NASDAQ:CYBR) is the most popular stock in this table. On the other hand Amyris Inc (NASDAQ:AMRS) is the least popular one with only 14 bullish hedge fund positions. ASGN Incorporated (NYSE:ASGN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ASGN is 52.8. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately ASGN wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ASGN investors were disappointed as the stock returned -0.4% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.