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Hedge Funds Aren’t Crazy About Robert Half International Inc. (RHI) Anymore

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Is Robert Half International Inc. (NYSE:RHI) a buy here? Investors who are in the know are taking a bearish view. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience

To most investors, hedge funds are perceived as worthless, outdated financial vehicles of years past. While there are over 8000 funds in operation at present, we choose to focus on the leaders of this club, about 450 funds. Most estimates calculate that this group controls the majority of all hedge funds’ total asset base, and by watching their highest performing stock picks, we have identified a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as integral, positive insider trading activity is another way to break down the world of equities. Obviously, there are many stimuli for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).

Keeping this in mind, it’s important to take a look at the latest action surrounding Robert Half International Inc. (NYSE:RHI).

What have hedge funds been doing with Robert Half International Inc. (NYSE:RHI)?

At Q1’s end, a total of 23 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the most valuable position in Robert Half International Inc. (NYSE:RHI), worth close to $60 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $45.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include John Thaler’s JAT Capital Management, Christopher Lord’s Criterion Capital and Alexander Mitchell’s Scopus Asset Management.

Judging by the fact that Robert Half International Inc. (NYSE:RHI) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few funds that decided to sell off their full holdings at the end of the first quarter. Interestingly, Clint Carlson’s Carlson Capital said goodbye to the biggest position of all the hedgies we key on, worth about $46.1 million in stock., and Ken Grossman and Glen Schneider of SG Capital Management was right behind this move, as the fund dropped about $6.8 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Robert Half International Inc. (NYSE:RHI)?

Insider purchases made by high-level executives is at its handiest when the company in question has experienced transactions within the past six months. Over the last six-month time period, Robert Half International Inc. (NYSE:RHI) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Robert Half International Inc. (NYSE:RHI). These stocks are On Assignment, Inc. (NYSE:ASGN), 51job, Inc. (ADR) (NASDAQ:JOBS), Paychex, Inc. (NASDAQ:PAYX), Team Health Holdings LLC (NYSE:TMH), and Manpowergroup Inc (NYSE:MAN). This group of stocks are in the staffing & outsourcing services industry and their market caps match RHI’s market cap.

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