Is SEI Investments Company (NASDAQ:SEIC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
SEI Investments Company (NASDAQ:SEIC) shareholders have witnessed a decrease in hedge fund interest in recent months. Our calculations also showed that seic isn't among the 30 most popular stocks among hedge funds.
To most market participants, hedge funds are assumed to be unimportant, old financial tools of years past. While there are more than 8000 funds trading at the moment, Our researchers look at the bigwigs of this club, around 750 funds. It is estimated that this group of investors control most of all hedge funds' total asset base, and by monitoring their top investments, Insider Monkey has uncovered a number of investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
We're going to go over the recent hedge fund action surrounding SEI Investments Company (NASDAQ:SEIC).
How are hedge funds trading SEI Investments Company (NASDAQ:SEIC)?
At Q1's end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in SEIC a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in SEI Investments Company (NASDAQ:SEIC), which was worth $56.8 million at the end of the first quarter. On the second spot was Arrowstreet Capital which amassed $51.2 million worth of shares. Moreover, Renaissance Technologies, Citadel Investment Group, and Two Sigma Advisors were also bullish on SEI Investments Company (NASDAQ:SEIC), allocating a large percentage of their portfolios to this stock.
Because SEI Investments Company (NASDAQ:SEIC) has faced a decline in interest from the aggregate hedge fund industry, it's safe to say that there were a few fund managers that slashed their full holdings in the third quarter. Interestingly, James Parsons's Junto Capital Management dropped the biggest position of the "upper crust" of funds followed by Insider Monkey, worth about $23.3 million in stock, and Ray Dalio's Bridgewater Associates was right behind this move, as the fund dropped about $2.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as SEI Investments Company (NASDAQ:SEIC) but similarly valued. These stocks are Athene Holding Ltd. (NYSE:ATH), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), MongoDB, Inc. (NASDAQ:MDB), and BorgWarner Inc. (NYSE:BWA). This group of stocks' market values are closest to SEIC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATH,35,1311162,-8 NBIX,35,1105095,-2 MDB,27,961692,4 BWA,21,667423,-1 Average,29.5,1011343,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $1011 million. That figure was $334 million in SEIC's case. Athene Holding Ltd. (NYSE:ATH) is the most popular stock in this table. On the other hand BorgWarner Inc. (NYSE:BWA) is the least popular one with only 21 bullish hedge fund positions. SEI Investments Company (NASDAQ:SEIC) is not the least popular stock in this group but hedge fund interest is still below average. 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 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. Unfortunately SEIC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SEIC investors were disappointed as the stock returned -2.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.