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Is WNS (Holdings) Limited (ADR) (WNS) A Good Stock to Buy?

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Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze WNS (Holdings) Limited (ADR) (NYSE:WNS) from the perspective of those successful funds.

WNS (Holdings) Limited (ADR) (NYSE:WNS) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of September, same as at the end of June. 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 TriNet Group Inc (NYSE:TNET), Simmons First National Corporation (NASDAQ:SFNC), and New York REIT Inc (NYSE:NYRT) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

 Production Perig/Shutterstock.com

Production Perig/Shutterstock.com

Hedge fund activity in WNS (Holdings) Limited (ADR) (NYSE:WNS)

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the second quarter of 2016. The graph below displays the number of hedge funds with bullish positions in WNS over the last 5 quarters, which has seen only minor volatility. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

HedgeFund

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in WNS (Holdings) Limited (ADR) (NYSE:WNS). Renaissance Technologies has a $37.9 million position in the stock. On Renaissance Technologies’ heels is Portolan Capital Management, led by George McCabe, holding a $7.8 million position; 1.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions include Ken Fisher’s Fisher Asset Management, Charles Clough’s Clough Capital Partners, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.

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