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Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards SEI Investments Company (NASDAQ:SEIC).
Is SEIC stock a buy? SEI Investments Company (NASDAQ:SEIC) was in 33 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 37. SEIC investors should be aware of a decrease in hedge fund sentiment in recent months. There were 36 hedge funds in our database with SEIC holdings at the end of September. Our calculations also showed that SEIC isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Tom Gayner of Markel Gayner Asset Management
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Do Hedge Funds Think SEIC Is A Good Stock To Buy Now?
At Q4's end, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SEIC over the last 22 quarters. With the smart money's sentiment swirling, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Israel Englander's Millennium Management has the largest position in SEI Investments Company (NASDAQ:SEIC), worth close to $42 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Sunriver Management, managed by Will Cook, which holds a $35.3 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Chuck Royce's Royce & Associates, Tom Gayner's Markel Gayner Asset Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Sunriver Management allocated the biggest weight to SEI Investments Company (NASDAQ:SEIC), around 5.82% of its 13F portfolio. Phoenician Capital is also relatively very bullish on the stock, dishing out 4.82 percent of its 13F equity portfolio to SEIC.
Since SEI Investments Company (NASDAQ:SEIC) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few funds who were dropping their full holdings by the end of the fourth quarter. It's worth mentioning that John Brennan's Sirios Capital Management dropped the biggest position of all the hedgies watched by Insider Monkey, comprising close to $2.4 million in stock. Paul Tudor Jones's fund, Tudor Investment Corp, also said goodbye to its stock, about $2.3 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 3 funds by the end of the fourth 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 Sensata Technologies Holding plc (NYSE:ST), MKS Instruments, Inc. (NASDAQ:MKSI), Lightspeed POS Inc. (NYSE:LSPD), Bruker Corporation (NASDAQ:BRKR), CF Industries Holdings, Inc. (NYSE:CF), LPL Financial Holdings Inc (NASDAQ:LPLA), and Athene Holding Ltd. (NYSE:ATH). This group of stocks' market values are similar to SEIC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ST,35,1635842,-2 MKSI,27,408543,-8 LSPD,20,677464,9 BRKR,23,253001,-8 CF,42,834622,8 LPLA,43,1162142,6 ATH,36,1146379,5 Average,32.3,873999,1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $874 million. That figure was $282 million in SEIC's case. LPL Financial Holdings Inc (NASDAQ:LPLA) is the most popular stock in this table. On the other hand Lightspeed POS Inc. (NYSE:LSPD) is the least popular one with only 20 bullish hedge fund positions. SEI Investments Company (NASDAQ:SEIC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SEIC is 57. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on SEIC, though not to the same extent, as the stock returned 7.7% since Q4 (through April 1st) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.