Here is What Hedge Funds Think About Jack Henry & Associates, Inc. (JKHY)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Jack Henry & Associates, Inc. (NASDAQ:JKHY).

Jack Henry & Associates, Inc. (NASDAQ:JKHY) investors should be aware of a decrease in enthusiasm from smart money in recent months. Jack Henry & Associates, Inc. (NASDAQ:JKHY) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 31. There were 22 hedge funds in our database with JKHY holdings at the end of June. Our calculations also showed that JKHY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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 let’s view the key hedge fund action surrounding Jack Henry & Associates, Inc. (NASDAQ:JKHY).

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

Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the second quarter of 2021. By comparison, 30 hedge funds held shares or bullish call options in JKHY a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Arrowstreet Capital held the most valuable stake in Jack Henry & Associates, Inc. (NASDAQ:JKHY), which was worth $84 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $35.9 million worth of shares. Two Sigma Advisors, Adage Capital Management, and Citadel Investment Group 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 Quantamental Technologies allocated the biggest weight to Jack Henry & Associates, Inc. (NASDAQ:JKHY), around 0.14% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, setting aside 0.13 percent of its 13F equity portfolio to JKHY.

Seeing as Jack Henry & Associates, Inc. (NASDAQ:JKHY) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few fund managers who were dropping their positions entirely heading into Q4. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management sold off the largest investment of the 750 funds tracked by Insider Monkey, worth about $6.3 million in stock, and Paul Tudor Jones’s Tudor Investment Corp was right behind this move, as the fund dumped about $3.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Jack Henry & Associates, Inc. (NASDAQ:JKHY) but similarly valued. We will take a look at Ares Management Corp (NYSE:ARES), Pentair plc (NYSE:PNR), NovoCure Limited (NASDAQ:NVCR), Freshworks Inc. (NASDAQ:FRSH), CF Industries Holdings, Inc. (NYSE:CF), F5, Inc. (NASDAQ:FFIV), and Medical Properties Trust, Inc. (NYSE:MPW). This group of stocks’ market valuations match JKHY’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.1 hedge funds with bullish positions and the average amount invested in these stocks was $636 million. That figure was $201 million in JKHY’s case. CF Industries Holdings, Inc. (NYSE:CF) is the most popular stock in this table. On the other hand Medical Properties Trust, Inc. (NYSE:MPW) is the least popular one with only 18 bullish hedge fund positions. Jack Henry & Associates, Inc. (NASDAQ:JKHY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JKHY is 29.2. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 29.6% in 2021 and surpassed the market again by 3.6 percentage points. Unfortunately JKHY wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); JKHY investors were disappointed as the stock returned 2.1% since the end of September (through 12/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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