Does Automatic Data Processing (NASDAQ:ADP) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
Automatic Data Processing (NASDAQ:ADP) was in 32 hedge funds’ portfolios at the end of the third quarter of 2016. ADP has seen a decrease in hedge fund interest in recent months. There were 34 hedge funds in our database with ADP holdings at the end of the second quarter. 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, or vice-versa. That’s why at the end of this article we will examine companies such as The Bank of New York Mellon Corporation (NYSE:BK), Kinder Morgan Inc (NYSE:KMI), and Phillips 66 (NYSE:PSX) to gather more data points.
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Hedge fund activity in Automatic Data Processing (NASDAQ:ADP)
At Q3’s end, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a 6% dip from the second quarter of 2016. That followed a large increase during the second quarter, during which the number of hedge fund positions jumped by over 25%. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Andy Brown’s Cedar Rock Capital has the most valuable position in Automatic Data Processing (NASDAQ:ADP), worth close to $374.6 million, accounting for 9.2% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, led by Jim Simons, holding a $54.9 million position. Remaining members of the smart money with similar optimism contain Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Tom Gayner’s Markel Gayner Asset Management.