Did Hedge Funds Drop The Ball On Manhattan Associates, Inc. (MANH) ?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider Manhattan Associates, Inc. (NASDAQ:MANH) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is Manhattan Associates, Inc. (NASDAQ:MANH) a buy here? The best stock pickers are selling. The number of long hedge fund positions shrunk by 3 lately. Our calculations also showed that MANH isn’t among the 30 most popular stocks among hedge funds. MANH was in 20 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 23 hedge funds in our database with MANH holdings at the end of the previous quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Chuck Royce

We’re going to take a look at the latest hedge fund action surrounding Manhattan Associates, Inc. (NASDAQ:MANH).

Hedge fund activity in Manhattan Associates, Inc. (NASDAQ:MANH)

At Q4’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in MANH over the last 14 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


Among these funds, RGM Capital held the most valuable stake in Manhattan Associates, Inc. (NASDAQ:MANH), which was worth $79.2 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $41.9 million worth of shares. Moreover, AQR Capital Management, GLG Partners, and Renaissance Technologies were also bullish on Manhattan Associates, Inc. (NASDAQ:MANH), allocating a large percentage of their portfolios to this stock.

Since Manhattan Associates, Inc. (NASDAQ:MANH) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedge funds that slashed their positions entirely heading into Q3. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management cut the biggest position of all the hedgies monitored by Insider Monkey, comprising close to $2.6 million in stock, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt. was right behind this move, as the fund dropped about $0.8 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 3 funds heading into Q3.

Let’s now take a look at hedge fund activity in other stocks similar to Manhattan Associates, Inc. (NASDAQ:MANH). These stocks are Clean Harbors Inc (NYSE:CLH), Verint Systems Inc. (NASDAQ:VRNT), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), and FS KKR Capital Corp. (NYSE:FSK). This group of stocks’ market valuations are closest to MANH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CLH 23 235723 5
VRNT 18 242649 0
AJRD 19 391598 0
FSK 20 173101 11
Average 20 260768 4

View table here if you experience formatting issues.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $261 million. That figure was $241 million in MANH’s case. Clean Harbors Inc (NYSE:CLH) is the most popular stock in this table. On the other hand Verint Systems Inc. (NASDAQ:VRNT) is the least popular one with only 18 bullish hedge fund positions. Manhattan Associates, Inc. (NASDAQ:MANH) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on MANH as the stock returned 42% and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.