The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Insperity Inc (NYSE:NSP) based on those filings.
Insperity Inc (NYSE:NSP) has seen an increase in support from the world’s most elite money managers recently. NSP was in 29 hedge funds’ portfolios at the end of the first quarter of 2020. There were 21 hedge funds in our database with NSP positions at the end of the previous quarter. Our calculations also showed that NSP 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.
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a gander at the key hedge fund action surrounding Insperity Inc (NYSE:NSP).
What does smart money think about Insperity Inc (NYSE:NSP)?
Heading into the second quarter of 2020, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in NSP over the last 18 quarters. 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 Insperity Inc (NYSE:NSP) was held by Lakewood Capital Management, which reported holding $46 million worth of stock at the end of September. It was followed by Glenview Capital with a $16.4 million position. Other investors bullish on the company included Millennium Management, Marshall Wace LLP, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Soapstone Capital allocated the biggest weight to Insperity Inc (NYSE:NSP), around 4.82% of its 13F portfolio. Value Holdings LP is also relatively very bullish on the stock, designating 3.98 percent of its 13F equity portfolio to NSP.
As one would reasonably expect, specific money managers have jumped into Insperity Inc (NYSE:NSP) headfirst. Lakewood Capital Management, managed by Anthony Bozza, established the largest position in Insperity Inc (NYSE:NSP). Lakewood Capital Management had $46 million invested in the company at the end of the quarter. Tim Curro’s Value Holdings LP also made a $8.4 million investment in the stock during the quarter. The following funds were also among the new NSP investors: Jeff Osher’s No Street Capital, Greg Eisner’s Engineers Gate Manager, and Brandon Haley’s Holocene Advisors.
Let’s go over hedge fund activity in other stocks similar to Insperity Inc (NYSE:NSP). We will take a look at Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), Navient Corp (NASDAQ:NAVI), First Financial Bancorp (NASDAQ:FFBC), and The Geo Group, Inc. (NYSE:GEO). This group of stocks’ market valuations match NSP’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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 $106 million. That figure was $154 million in NSP’s case. Navient Corp (NASDAQ:NAVI) is the most popular stock in this table. On the other hand First Financial Bancorp (NASDAQ:FFBC) is the least popular one with only 8 bullish hedge fund positions. Insperity Inc (NYSE:NSP) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on NSP as the stock returned 39% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.