Hedge Funds Are Crazy About Janus Capital Group Inc (JNS)

The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Janus Capital Group Inc (NYSE:JNS) .

Janus Capital Group Inc (NYSE:JNS) was included in the equity portfolios of 20 investors tracked by Insider Monkey at the end of September. JNS shareholders witnessed an increase in hedge fund sentiment during the third quarter, as there had been 15 investors long the stock at the end of June. However, 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 The Wendy’s Company (NASDAQ:WEN), The Geo Group, Inc. (NYSE:GEO), and HSN, Inc. (NASDAQ:HSNI) 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.

How are hedge funds trading Janus Capital Group Inc (NYSE:JNS)?

Heading into the fourth quarter of 2016, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards JNS over the last 5 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Ariel Investments, led by John W. Rogers, holds the biggest position in Janus Capital Group Inc (NYSE:JNS). Ariel Investments has a $103.5 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by Mario Gabelli’s GAMCO Investors, with a $84.1 million position. Some other professional money managers that are bullish consist of Ken Fisher’s Fisher Asset Management and D. E. Shaw’s D E Shaw. 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-microcap stocks.

As industrywide interest jumped, key money managers were breaking ground themselves. Millennium Management created the most valuable position in Janus Capital Group Inc (NYSE:JNS). Millennium Management had $20.1 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also initiated a $1.6 million position during the quarter. The following funds were also among the new JNS investors: Matthew Tewksbury’s Stevens Capital Management, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Janus Capital Group Inc (NYSE:JNS) but similarly valued. We will take a look at The Wendy’s Company (NASDAQ:WEN), The Geo Group, Inc. (NYSE:GEO), HSN, Inc. (NASDAQ:HSNI), and Acadia Realty Trust (NYSE:AKR). This group of stocks’ market caps resemble JNS’s market cap.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $307 million, which is close to the $306 million figure in JNS’s case. The Wendy’s Company (NASDAQ:WEN) is the most popular stock in this table. On the other hand Acadia Realty Trust (NYSE:AKR) is the least popular one with only six bullish hedge fund positions. Compared to these stocks Janus Capital Group Inc (NYSE:JNS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None