After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Accenture Plc (NYSE:ACN).
Is ACN a good stock to buy now? The smart money was taking a bullish view. The number of bullish hedge fund positions moved up by 2 recently. Accenture Plc (NYSE:ACN) was in 46 hedge funds’ portfolios at the end of September. The all time high for this statistic is 49. Our calculations also showed that ACN 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.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Now let’s take a look at the recent hedge fund action surrounding Accenture Plc (NYSE:ACN).
Do Hedge Funds Think ACN Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the second quarter of 2020. By comparison, 45 hedge funds held shares or bullish call options in ACN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in Accenture Plc (NYSE:ACN). AQR Capital Management has a $293.8 million position in the stock, comprising 0.5% of its 13F portfolio. The second most bullish fund manager is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $160.2 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other peers that are bullish encompass Ken Griffin’s Citadel Investment Group, Guardian Capital’s GuardCap Asset Management and Kevin Oram and Peter Uddo’s Praesidium Investment Management Company. In terms of the portfolio weights assigned to each position Praesidium Investment Management Company allocated the biggest weight to Accenture Plc (NYSE:ACN), around 5.89% of its 13F portfolio. Intermede Investment Partners is also relatively very bullish on the stock, setting aside 3.89 percent of its 13F equity portfolio to ACN.
As aggregate interest increased, key money managers were leading the bulls’ herd. Renaissance Technologies, established the most valuable position in Accenture Plc (NYSE:ACN). Renaissance Technologies had $18 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $6.8 million position during the quarter. The following funds were also among the new ACN investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Thomas Lee’s Lee Capital Management, and Mika Toikka’s AlphaCrest Capital Management.
Let’s check out hedge fund activity in other stocks similar to Accenture Plc (NYSE:ACN). These stocks are AstraZeneca plc (NYSE:AZN), Eli Lilly and Company (NYSE:LLY), Medtronic plc (NYSE:MDT), NextEra Energy, Inc. (NYSE:NEE), Bristol Myers Squibb Company (NYSE:BMY), Chevron Corporation (NYSE:CVX), and Zoom Video Communications, Inc. (NASDAQ:ZM). All of these stocks’ market caps are closest to ACN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AZN | 33 | 2259713 | -5 |
| LLY | 60 | 2529803 | 9 |
| MDT | 62 | 2975696 | 4 |
| NEE | 64 | 2738763 | 9 |
| BMY | 124 | 7566836 | -12 |
| CVX | 43 | 1247481 | -7 |
| ZM | 56 | 9721272 | 8 |
| Average | 63.1 | 4148509 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 63.1 hedge funds with bullish positions and the average amount invested in these stocks was $4149 million. That figure was $1149 million in ACN’s case. Bristol Myers Squibb Company (NYSE:BMY) is the most popular stock in this table. On the other hand AstraZeneca plc (NYSE:AZN) is the least popular one with only 33 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 42.3. 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 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 beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on ACN, though not to the same extent, as the stock returned 11% since the end of Q3 (through December 8th) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
