Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 5.2% in the 12 months ending October 30, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, hedge funds’ 30 preferred S&P 500 stocks (as of September 2014) generated a return of 9.5% during the same 12-month period, with 63% of these stock picks outperformed the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 16-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Willis Group Holdings PLC (NYSE:WSH).
Willis Group Holdings PLC (NYSE:WSH) has seen an increase in hedge fund interest lately. WSH was in 27 hedge funds’ portfolios at the end of the third quarter of 2015. There were 26 hedge funds in our database with WSH positions at the end of the previous 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. That’s why at the end of this article we will examine companies such as News Corp (NASDAQ:NWSA), AGL Resources Inc. (NYSE:GAS), and Gildan Activewear Inc (USA) (NYSE:GIL) to gather more data points.
To the average investor, there are many methods market participants employ to size up their holdings. A pair of the less known methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can outclass the broader indices by a significant margin (see the details here).
Keeping this in mind, we’re going to view the key action surrounding Willis Group Holdings PLC (NYSE:WSH).
Hedge fund activity in Willis Group Holdings PLC (NYSE:WSH)
At the Q3’s end, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, ValueAct Capital, managed by Jeffrey Ubben, holds the largest position in Willis Group Holdings PLC (NYSE:WSH). ValueAct Capital has an $754.8 million position in the stock, comprising 4.4% of its 13F portfolio. The second most bullish fund manager is Cantillon Capital Management, led by William von Mueffling, holding an $340.9 million position; 7.3% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish include Richard S. Pzena’s Pzena Investment Management, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.