Coronavirus is probably the #1 concern in investors’ minds right now. It should be. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW. We predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 months. We also told you to short the market ETFs and buy long-term bonds. Investors who agreed with us and replicated these trades are up double digits whereas the market is down double digits. Our article also called for a total international travel ban to prevent the spread of the coronavirus especially from Europe. We were one step ahead of the markets and the president (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Keeping this in mind, let’s analyze whether Manpowergroup Inc (NYSE:MAN) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Is Manpowergroup Inc (NYSE:MAN) a good stock to buy now? Investors who are in the know are getting more optimistic. The number of bullish hedge fund bets inched up by 7 recently. Our calculations also showed that MAN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In today’s marketplace there are dozens of tools market participants put to use to value publicly traded companies. Some of the best tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outperform their index-focused peers by a healthy amount (see the details here).
David E. Shaw of D.E. Shaw
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the fresh hedge fund action regarding Manpowergroup Inc (NYSE:MAN).
How have hedgies been trading Manpowergroup Inc (NYSE:MAN)?
Heading into the first quarter of 2020, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 35% from the third quarter of 2019. On the other hand, there were a total of 25 hedge funds with a bullish position in MAN a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Manpowergroup Inc (NYSE:MAN) was held by AQR Capital Management, which reported holding $274.4 million worth of stock at the end of September. It was followed by Junto Capital Management with a $41 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and GLG Partners. In terms of the portfolio weights assigned to each position Junto Capital Management allocated the biggest weight to Manpowergroup Inc (NYSE:MAN), around 1.94% of its 13F portfolio. Cinctive Capital Management is also relatively very bullish on the stock, earmarking 0.64 percent of its 13F equity portfolio to MAN.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Junto Capital Management, managed by James Parsons, initiated the most valuable position in Manpowergroup Inc (NYSE:MAN). Junto Capital Management had $41 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $19.3 million position during the quarter. The other funds with brand new MAN positions are Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, David Harding’s Winton Capital Management, and Qing Li’s Sciencast Management.
Let’s now review hedge fund activity in other stocks similar to Manpowergroup Inc (NYSE:MAN). We will take a look at First Citizens BancShares Inc. (NASDAQ:FCNCA), KT Corporation (NYSE:KT), Williams-Sonoma, Inc. (NYSE:WSM), and Popular Inc (NASDAQ:BPOP). All of these stocks’ market caps match MAN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FCNCA | 23 | 200352 | 5 |
| KT | 17 | 259132 | -5 |
| WSM | 29 | 336409 | 3 |
| BPOP | 33 | 817539 | 2 |
| Average | 25.5 | 403358 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $403 million. That figure was $476 million in MAN’s case. Popular Inc (NASDAQ:BPOP) is the most popular stock in this table. On the other hand KT Corporation (NYSE:KT) is the least popular one with only 17 bullish hedge fund positions. Manpowergroup Inc (NYSE:MAN) 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but beat the market by 5.5 percentage points. Unfortunately MAN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MAN were disappointed as the stock returned -40.6% 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 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
