Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) based on that data and determine whether they were really smart about the stock.
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) investors should be aware of an increase in enthusiasm from smart money in recent months. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) was in 65 hedge funds’ portfolios at the end of June. The all time high for this statistics is 59. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 57 hedge funds in our database with SSNC holdings at the end of March. Our calculations also showed that SSNC isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
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 56 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 34% through August 17th. 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. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock.. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now we’re going to take a look at the key hedge fund action encompassing SS&C Technologies Holdings, Inc. (NASDAQ:SSNC).
How have hedgies been trading SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)?
At the end of June, a total of 65 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the first quarter of 2020. By comparison, 41 hedge funds held shares or bullish call options in SSNC a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the biggest position in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), worth close to $529.6 million, amounting to 3% of its total 13F portfolio. On Select Equity Group’s heels is William von Mueffling of Cantillon Capital Management, with a $236.2 million position; 2.1% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism contain Panayotis Takis Sparaggis’s Alkeon Capital Management, Alexander Captain’s Cat Rock Capital and John Smith Clark’s Southpoint Capital Advisors. In terms of the portfolio weights assigned to each position Blacksheep Fund Management allocated the biggest weight to SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), around 16.24% of its 13F portfolio. Cat Rock Capital is also relatively very bullish on the stock, setting aside 14.62 percent of its 13F equity portfolio to SSNC.
Consequently, key hedge funds were breaking ground themselves. Blacksheep Fund Management, managed by Alexis Fortune, created the biggest position in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). Blacksheep Fund Management had $38.4 million invested in the company at the end of the quarter. Thomas E. Claugus’s GMT Capital also made a $26.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, David Fiszel’s Honeycomb Asset Management, and Seth Klarman’s Baupost Group.
Let’s now review hedge fund activity in other stocks similar to SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). These stocks are Ryanair Holdings plc (NASDAQ:RYAAY), Domino’s Pizza, Inc. (NYSE:DPZ), ViacomCBS Inc. (NASDAQ:VIAC), GSX Techedu Inc. (NYSE:GSX), Zscaler, Inc. (NASDAQ:ZS), Kansas City Southern (NYSE:KSU), and Jack Henry & Associates, Inc. (NASDAQ:JKHY). All of these stocks’ market caps are similar to SSNC’s market cap.
|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 34.1 hedge funds with bullish positions and the average amount invested in these stocks was $739 million. That figure was $2274 million in SSNC’s case. Domino’s Pizza, Inc. (NYSE:DPZ) is the most popular stock in this table. On the other hand GSX Techedu Inc. (NYSE:GSX) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is more popular among hedge funds. Our overall hedge fund sentiment score for SSNC is 90. 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 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 28.2% in 2020 through August 24th but still managed to beat the market by 20.6 percentage points. Hedge funds were also right about betting on SSNC, though not to the same extent, as the stock returned 11.3% since the end of June and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.