It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in On Assignment, Inc. (NYSE:ASGN) .
On Assignment, Inc. (NYSE:ASGN) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 18 hedge funds’ portfolios at the end of the third quarter of 2016. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Novavax, Inc. (NASDAQ:NVAX), Mine Safety Appliances (NYSE:MSA), and LTC Properties Inc (NYSE:LTC) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How are hedge funds trading On Assignment, Inc. (NYSE:ASGN)?
Heading into the fourth quarter of 2016, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in ASGN over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Mariko Gordon’s Daruma Asset Management, holds the number one position in On Assignment, Inc. (NYSE:ASGN). Daruma Asset Management has a $42.9 million position in the stock, comprising 2.6% of its 13F portfolio. The second most bullish fund manager is Jeff Lignelli of Incline Global Management, with a $35.2 million position; 6.4% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish contain Douglas Dossey and Arthur Young’s Tensile Capital, Chuck Royce’s Royce & Associates, and Ira Unschuld’s Brant Point Investment Management. We should note that Tensile Capital is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as On Assignment, Inc. (NYSE:ASGN) has sustained flat interest from hedge fund managers, we can see that there was a specific group of hedge funds who sold off their entire stakes heading into fourth quarter. Interestingly, Steve Cohen’s Point72 Asset Management sold off the largest position of all the investors studied by Insider Monkey, valued at an estimated $6.5 million in stock. Michael Platt and William Reeves’ fund, BlueCrest Capital Mgmt., also sold off its stock, about $3.1 million worth.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as On Assignment, Inc. (NYSE:ASGN) but similarly valued. We will take a look at Novavax, Inc. (NASDAQ:NVAX), Mine Safety Appliances (NYSE:MSA), LTC Properties Inc (NYSE:LTC), and MGE Energy, Inc. (NASDAQ:MGEE). This group of stocks’ market caps match ASGN’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $140 million in ASGN’s case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand LTC Properties Inc (NYSE:LTC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks On Assignment, Inc. (NYSE:ASGN) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.