Hedge Funds Keep Buying Accenture Plc (ACN)

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Accenture Plc (NYSE:ACN).

Accenture Plc (NYSE:ACN) investors should pay attention to an increase in hedge fund interest lately. Accenture Plc (NYSE:ACN) was in 52 hedge funds’ portfolios at the end of June. The all time high for this statistic is 50. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ACN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the recent hedge fund action encompassing Accenture Plc (NYSE:ACN).

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

At the end of the second quarter, a total of 52 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ACN over the last 24 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

More specifically, GQG Partners was the largest shareholder of Accenture Plc (NYSE:ACN), with a stake worth $547.8 million reported as of the end of June. Trailing GQG Partners was D E Shaw, which amassed a stake valued at $365.3 million. AQR Capital Management, GuardCap Asset Management, and Adage Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position GuardCap Asset Management allocated the biggest weight to Accenture Plc (NYSE:ACN), around 4.74% of its 13F portfolio. Intermede Investment Partners is also relatively very bullish on the stock, setting aside 3.56 percent of its 13F equity portfolio to ACN.

As aggregate interest increased, specific money managers have jumped into Accenture Plc (NYSE:ACN) headfirst. Renaissance Technologies, initiated the most outsized position in Accenture Plc (NYSE:ACN). Renaissance Technologies had $127 million invested in the company at the end of the quarter. James Parsons’s Junto Capital Management also made a $79.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and George Soros’s Soros Fund Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Accenture Plc (NYSE:ACN) but similarly valued. We will take a look at BHP Group (NYSE:BHP), Shopify Inc (NYSE:SHOP), United Parcel Service, Inc. (NYSE:UPS), T-Mobile US, Inc. (NASDAQ:TMUS), Texas Instruments Incorporated (NASDAQ:TXN), Costco Wholesale Corporation (NASDAQ:COST), and McDonald’s Corporation (NYSE:MCD). All of these stocks’ market caps are closest to ACN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 60.7 hedge funds with bullish positions and the average amount invested in these stocks was $4921 million. That figure was $3152 million in ACN’s case. T-Mobile US, Inc. (NASDAQ:TMUS) is the most popular stock in this table. On the other hand BHP Group (NYSE:BHP) is the least popular one with only 18 bullish hedge fund positions. Accenture Plc (NYSE:ACN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACN is 59.7. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on ACN as the stock returned 10.5% since the end of the second quarter (through 10/1) and outperformed the market by an even larger margin.

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