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 have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider SEI Investments Company (NASDAQ:SEIC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is SEIC a good stock to buy? SEI Investments Company (NASDAQ:SEIC) has experienced a decrease in support from the world’s most elite money managers of late. SEI Investments Company (NASDAQ:SEIC) was in 36 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 37. Our calculations also showed that SEIC 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. With all of this in mind let’s take a peek at the fresh hedge fund action encompassing SEI Investments Company (NASDAQ:SEIC).
Do Hedge Funds Think SEIC Is A Good Stock To Buy Now?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in SEIC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GLG Partners was the largest shareholder of SEI Investments Company (NASDAQ:SEIC), with a stake worth $24.4 million reported as of the end of September. Trailing GLG Partners was Royce & Associates, which amassed a stake valued at $23.2 million. Sunriver Management, Markel Gayner Asset Management, and Goodnow 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 Phoenician Capital allocated the biggest weight to SEI Investments Company (NASDAQ:SEIC), around 6.42% of its 13F portfolio. Sunriver Management is also relatively very bullish on the stock, designating 3.53 percent of its 13F equity portfolio to SEIC.
Because SEI Investments Company (NASDAQ:SEIC) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there were a few funds who were dropping their positions entirely heading into Q4. It’s worth mentioning that Peter Seuss’s Prana Capital Management sold off the largest position of the 750 funds tracked by Insider Monkey, comprising about $4.5 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also dumped its stock, about $1.2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as SEI Investments Company (NASDAQ:SEIC) but similarly valued. These stocks are Genpact Limited (NYSE:G), Hubbell Incorporated (NYSE:HUBB), Mirati Therapeutics, Inc. (NASDAQ:MRTX), Teck Resources Ltd (NYSE:TECK), Quanta Services Inc (NYSE:PWR), AptarGroup, Inc. (NYSE:ATR), and Howmet Aerospace Inc. (NYSE:HWM). This group of stocks’ market caps resemble SEIC’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 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $1005 million. That figure was $232 million in SEIC’s case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Teck Resources Ltd (NYSE:TECK) is the least popular one with only 27 bullish hedge fund positions. SEI Investments Company (NASDAQ:SEIC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SEIC is 74.1. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on SEIC, though not to the same extent, as the stock returned 11.5% since Q3 (through December 18th) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.