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The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought WNS (Holdings) Limited (NYSE:WNS) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is WNS (Holdings) Limited (NYSE:WNS) ready to rally soon? The smart money was in an optimistic mood. The number of bullish hedge fund positions inched up by 3 lately. WNS (Holdings) Limited (NYSE:WNS) was in 20 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WNS isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are numerous methods shareholders employ to value publicly traded companies. A duo of the most innovative methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the best money managers can outperform their index-focused peers by a very impressive margin (see the details here).
David Siegel of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Keeping this in mind we're going to take a peek at the key hedge fund action regarding WNS (Holdings) Limited (NYSE:WNS).
Hedge fund activity in WNS (Holdings) Limited (NYSE:WNS)
At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in WNS a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in WNS (Holdings) Limited (NYSE:WNS), which was worth $82.9 million at the end of the third quarter. On the second spot was Diamond Hill Capital which amassed $52.4 million worth of shares. Arrowstreet Capital, Fisher Asset Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Old Well Partners allocated the biggest weight to WNS (Holdings) Limited (NYSE:WNS), around 5.85% of its 13F portfolio. Intrepid Capital Management is also relatively very bullish on the stock, setting aside 3.31 percent of its 13F equity portfolio to WNS.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in WNS (Holdings) Limited (NYSE:WNS). Marshall Wace LLP had $7.5 million invested in the company at the end of the quarter. Campbell Wilson's Old Well Partners also made a $7.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Vikas Lunia's Lunia Capital, Mark Kingdon's Kingdon Capital, and D. E. Shaw's D E Shaw.
Let's go over hedge fund activity in other stocks similar to WNS (Holdings) Limited (NYSE:WNS). These stocks are El Paso Electric Company (NYSE:EE), EnerSys (NYSE:ENS), Watts Water Technologies Inc (NYSE:WTS), LiveRamp Holdings, Inc. (NYSE:RAMP), Plug Power, Inc. (NASDAQ:PLUG), John Bean Technologies Corporation (NYSE:JBT), and Advanced Disposal Services, Inc. (NYSE:ADSW). All of these stocks' market caps resemble WNS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EE,15,248090,-8 ENS,26,109145,10 WTS,25,250368,6 RAMP,25,180604,9 PLUG,20,271588,5 JBT,16,93148,4 ADSW,25,719995,4 Average,21.7,267563,4.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.7 hedge funds with bullish positions and the average amount invested in these stocks was $268 million. That figure was $230 million in WNS's case. EnerSys (NYSE:ENS) is the most popular stock in this table. On the other hand El Paso Electric Company (NYSE:EE) is the least popular one with only 15 bullish hedge fund positions. WNS (Holdings) Limited (NYSE:WNS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WNS is 38. 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. 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 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. A small number of hedge funds were also right about betting on WNS as the stock returned 16.3% in the third quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.