Did Hedge Funds Make The Right Call On Huron Consulting Group Inc. (HURN) ?

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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Huron Consulting Group Inc. (NASDAQ:HURN) and determine whether the smart money was really smart about this stock.

Huron Consulting Group Inc. (NASDAQ:HURN) has seen an increase in activity from the world’s largest hedge funds of late. Our calculations also showed that HURN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Jim Simons Founder of Renaissance Technologies

At Insider Monkey we scour multiple sources to uncover the next great investment idea. With Federal Reserve creating trillions of dollars out of thin air, we believe gold prices will keep increasing. So, we are checking out gold stocks like this small gold mining company. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now let’s take a peek at the key hedge fund action surrounding Huron Consulting Group Inc. (NASDAQ:HURN).

What does smart money think about Huron Consulting Group Inc. (NASDAQ:HURN)?

At Q1’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the fourth quarter of 2019. By comparison, 11 hedge funds held shares or bullish call options in HURN a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Huron Consulting Group Inc. (NASDAQ:HURN) was held by Renaissance Technologies, which reported holding $18.9 million worth of stock at the end of September. It was followed by Marshall Wace LLP with a $5.9 million position. Other investors bullish on the company included Columbus Circle Investors, SG Capital Management, and Intrinsic Edge Capital. In terms of the portfolio weights assigned to each position SG Capital Management allocated the biggest weight to Huron Consulting Group Inc. (NASDAQ:HURN), around 1.89% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, setting aside 0.52 percent of its 13F equity portfolio to HURN.

As aggregate interest increased, key money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the largest position in Huron Consulting Group Inc.(NASDAQ:HURN). Marshall Wace LLP had $5.9 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $1.7 million position during the quarter. The other funds with brand new HURN positions are Thomas Bailard’s Bailard Inc and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Huron Consulting Group Inc. (NASDAQ:HURN) but similarly valued. We will take a look at Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), Fangdd Network Group Ltd. (NASDAQ:DUO), Middlesex Water Company (NASDAQ:MSEX), and Avis Budget Group Inc. (NASDAQ:CAR). This group of stocks’ market caps match HURN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
YMAB 11 98663 -1
DUO 1 413 0
MSEX 7 49591 -2
CAR 23 475620 -4
Average 10.5 156072 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $57 million in HURN’s case. Avis Budget Group Inc. (NASDAQ:CAR) is the most popular stock in this table. On the other hand Fangdd Network Group Ltd. (NASDAQ:DUO) is the least popular one with only 1 bullish hedge fund positions. Huron Consulting Group Inc. (NASDAQ:HURN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 18.6% in 2020 through July 27th but beat the market by 17.1 percentage points. Unfortunately HURN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on HURN were disappointed as the stock returned -5.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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