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Is Huron Consulting Group Inc. (HURN) Going to Burn These Hedge Funds?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Huron Consulting Group Inc. (NASDAQ:HURN) in this article.

Huron Consulting Group Inc. (NASDAQ:HURN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of September. At the end of this article we will also compare HURN to other stocks including EnPro Industries, Inc. (NYSE:NPO), Brookdale Senior Living, Inc. (NYSE:BKD), and Coherus Biosciences Inc (NASDAQ:CHRS) to get a better sense of its popularity.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to 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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s check out the new hedge fund action regarding Huron Consulting Group Inc. (NASDAQ:HURN).

What does smart money think about Huron Consulting Group Inc. (NASDAQ:HURN)?

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HURN over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Huron Consulting Group Inc. (NASDAQ:HURN), with a stake worth $18.4 million reported as of the end of September. Trailing Renaissance Technologies was SG Capital Management, which amassed a stake valued at $12.1 million. D E Shaw, Millennium Management, and Intrinsic Edge Capital 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 SG Capital Management allocated the biggest weight to Huron Consulting Group Inc. (NASDAQ:HURN), around 2.29% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, dishing out 0.21 percent of its 13F equity portfolio to HURN.

Because Huron Consulting Group Inc. (NASDAQ:HURN) has witnessed declining sentiment from the smart money, it’s easy to see that there is a sect of money managers who sold off their entire stakes by the end of the third quarter. It’s worth mentioning that Howard Marks’s Oaktree Capital Management dropped the biggest stake of all the hedgies tracked by Insider Monkey, valued at close to $23.7 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its stock, about $16.4 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Huron Consulting Group Inc. (NASDAQ:HURN) but similarly valued. These stocks are EnPro Industries, Inc. (NYSE:NPO), Brookdale Senior Living, Inc. (NYSE:BKD), Coherus Biosciences Inc (NASDAQ:CHRS), and Presidio, Inc. (NASDAQ:PSDO). This group of stocks’ market caps match HURN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NPO 15 127791 4
BKD 20 478052 -2
CHRS 22 213990 -5
PSDO 22 189614 3
Average 19.75 252362 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $252 million. That figure was $44 million in HURN’s case. Coherus Biosciences Inc (NASDAQ:CHRS) is the most popular stock in this table. On the other hand EnPro Industries, Inc. (NYSE:NPO) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Huron Consulting Group Inc. (NASDAQ:HURN) is even less popular than NPO. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on HURN, though not to the same extent, as the stock returned 9.3% during the fourth quarter (through 11/30) and outperformed the market as well.

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

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