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Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks aren't doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Manpowergroup Inc (NYSE:MAN) changed recently.
Is MAN a good stock to buy? Manpowergroup Inc (NYSE:MAN) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 34 hedge funds' portfolios at the end of the third quarter of 2020. Our calculations also showed that MAN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Cousins Properties Incorporated (NYSE:CUZ), PVH Corp (NYSE:PVH), and Stamps.com Inc. (NASDAQ:STMP) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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Matthew Hulsizer of PEAK6 Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Keeping this in mind let's take a look at the latest hedge fund action encompassing Manpowergroup Inc (NYSE:MAN).
Do Hedge Funds Think MAN Is A Good Stock To Buy Now?
At third quarter's end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in MAN 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.
When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in Manpowergroup Inc (NYSE:MAN). AQR Capital Management has a $126.5 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $78.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, William B. Gray's Orbis Investment Management and Jim Simons (founder)'s Renaissance Technologies. In terms of the portfolio weights assigned to each position Junto Capital Management allocated the biggest weight to Manpowergroup Inc (NYSE:MAN), around 0.68% of its 13F portfolio. Orbis Investment Management is also relatively very bullish on the stock, designating 0.27 percent of its 13F equity portfolio to MAN.
Since Manpowergroup Inc (NYSE:MAN) has experienced bearish sentiment from the smart money, logic holds that there was a specific group of fund managers who were dropping their entire stakes by the end of the third quarter. Intriguingly, Paul Marshall and Ian Wace's Marshall Wace LLP said goodbye to the largest stake of all the hedgies watched by Insider Monkey, totaling close to $4.2 million in stock. Qing Li's fund, Sciencast Management, also sold off its stock, about $1.2 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Manpowergroup Inc (NYSE:MAN) but similarly valued. These stocks are Cousins Properties Incorporated (NYSE:CUZ), PVH Corp (NYSE:PVH), Stamps.com Inc. (NASDAQ:STMP), Simpson Manufacturing Co, Inc. (NYSE:SSD), Bandwidth Inc. (NASDAQ:BAND), Texas Roadhouse Inc (NASDAQ:TXRH), and PennyMac Financial Services Inc (NYSE:PFSI). All of these stocks' market caps are closest to MAN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CUZ,13,83776,-6 PVH,28,713571,0 STMP,31,664086,1 SSD,17,187561,-4 BAND,30,344258,0 TXRH,22,337281,-3 PFSI,31,443555,6 Average,24.6,396298,-0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.6 hedge funds with bullish positions and the average amount invested in these stocks was $396 million. That figure was $409 million in MAN's case. Stamps.com Inc. (NASDAQ:STMP) is the most popular stock in this table. On the other hand Cousins Properties Incorporated (NYSE:CUZ) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Manpowergroup Inc (NYSE:MAN) is more popular among hedge funds. Our overall hedge fund sentiment score for MAN is 85. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 33.3% in 2020 through December 18th but still managed to beat the market by 16.4 percentage points. Hedge funds were also right about betting on MAN as the stock returned 24.9% since the end of September (through 12/18) 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.
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Disclosure: None. This article was originally published at Insider Monkey.