At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not 51job, Inc. (NASDAQ:JOBS) makes for a good investment right now.
Is JOBS a good stock to buy now? 51job, Inc. (NASDAQ:JOBS) investors should pay attention to an increase in support from the world’s most elite money managers lately. 51job, Inc. (NASDAQ:JOBS) was in 10 hedge funds’ portfolios at the end of September. The all time high for this statistics is 14. Our calculations also showed that JOBS isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, 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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to go over the new hedge fund action surrounding 51job, Inc. (NASDAQ:JOBS).
Do Hedge Funds Think JOBS Is A Good Stock To Buy Now?
At the end of September, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 8 hedge funds with a bullish position in JOBS a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of 51job, Inc. (NASDAQ:JOBS), with a stake worth $12.1 million reported as of the end of September. Trailing Citadel Investment Group was Fisher Asset Management, which amassed a stake valued at $6.7 million. Bridgewater Associates, Millennium Management, and GLG Partners 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 Bridgewater Associates allocated the biggest weight to 51job, Inc. (NASDAQ:JOBS), around 0.05% of its 13F portfolio. Polar Capital is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to JOBS.
Consequently, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the biggest position in 51job, Inc. (NASDAQ:JOBS). Millennium Management had $3.8 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $2.4 million position during the quarter. The following funds were also among the new JOBS investors: Donald Sussman’s Paloma Partners and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as 51job, Inc. (NASDAQ:JOBS) but similarly valued. We will take a look at National Vision Holdings, Inc. (NASDAQ:EYE), Altair Engineering Inc. (NASDAQ:ALTR), The Ensign Group, Inc. (NASDAQ:ENSG), Millicom International Cellular S.A. (NASDAQ:TIGO), Artisan Partners Asset Management Inc (NYSE:APAM), Glacier Bancorp, Inc. (NASDAQ:GBCI), and Popular Inc (NASDAQ:BPOP). This group of stocks’ market caps are similar to JOBS’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 19.4 hedge funds with bullish positions and the average amount invested in these stocks was $241 million. That figure was $32 million in JOBS’s case. Popular Inc (NASDAQ:BPOP) is the most popular stock in this table. On the other hand Millicom International Cellular S.A. (NASDAQ:TIGO) is the least popular one with only 8 bullish hedge fund positions. 51job, Inc. (NASDAQ:JOBS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JOBS is 32. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately JOBS wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); JOBS investors were disappointed as the stock returned -6% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.