Hedge Fund Sentiment Is Stagnant On FactSet Research Systems Inc. (FDS)

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards FactSet Research Systems Inc. (NYSE:FDS) changed recently.

FactSet Research Systems Inc. (NYSE:FDS) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 28 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that FDS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare FDS to other stocks including Huazhu Group Limited (NASDAQ:HTHT), Camden Property Trust (NYSE:CPT), and LKQ Corporation (NASDAQ:LKQ) to get a better sense of its popularity.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to review the latest hedge fund action regarding FactSet Research Systems Inc. (NYSE:FDS).

Do Hedge Funds Think FDS Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in FDS over the last 25 quarters. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Echo Street Capital Management, managed by Greg Poole, holds the largest position in FactSet Research Systems Inc. (NYSE:FDS). Echo Street Capital Management has a $198.6 million position in the stock, comprising 1.4% of its 13F portfolio. Coming in second is Citadel Investment Group, led by Ken Griffin, holding a $139.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions include Israel Englander’s Millennium Management, Brandon Haley’s Holocene Advisors and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Echo Street Capital Management allocated the biggest weight to FactSet Research Systems Inc. (NYSE:FDS), around 1.4% of its 13F portfolio. Infini Capital is also relatively very bullish on the stock, setting aside 0.85 percent of its 13F equity portfolio to FDS.

Seeing as FactSet Research Systems Inc. (NYSE:FDS) has experienced a decline in interest from hedge fund managers, it’s safe to say that there was a specific group of fund managers who were dropping their full holdings in the third quarter. Interestingly, Gregg Moskowitz’s Interval Partners dumped the biggest investment of all the hedgies followed by Insider Monkey, worth about $2 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund sold off about $1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as FactSet Research Systems Inc. (NYSE:FDS) but similarly valued. These stocks are Huazhu Group Limited (NASDAQ:HTHT), Camden Property Trust (NYSE:CPT), LKQ Corporation (NASDAQ:LKQ), ABIOMED, Inc. (NASDAQ:ABMD), KANZHUN LIMITED (NASDAQ:BZ), NortonLifeLock Inc. (NASDAQ:NLOK), and Plug Power, Inc. (NASDAQ:PLUG). This group of stocks’ market valuations match FDS’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $949 million. That figure was $775 million in FDS’s case. LKQ Corporation (NASDAQ:LKQ) is the most popular stock in this table. On the other hand KANZHUN LIMITED (NASDAQ:BZ) is the least popular one with only 18 bullish hedge fund positions. FactSet Research Systems Inc. (NYSE:FDS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FDS is 58. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on FDS as the stock returned 17.4% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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