Is SS&C Technologies Holdings, Inc. (SSNC) Going to Burn These Hedge Funds?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards SS&C Technologies Holdings, Inc. (NASDAQ:SSNC).

SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) has experienced an increase in activity from the world’s largest hedge funds lately. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) was in 51 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 65. Our calculations also showed that SSNC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a look at the fresh hedge fund action regarding SS&C Technologies Holdings, Inc. (NASDAQ:SSNC).


Seth Klarman of Baupost Group

Do Hedge Funds Think SSNC Is A Good Stock To Buy Now?

At third quarter’s end, a total of 51 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in SSNC over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

The largest stake in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) was held by Select Equity Group, which reported holding $809.5 million worth of stock at the end of September. It was followed by Alkeon Capital Management with a $373.8 million position. Other investors bullish on the company included Cantillon Capital Management, Baupost Group, and Southpoint Capital Advisors. In terms of the portfolio weights assigned to each position Blacksheep Fund Management allocated the biggest weight to SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), around 12.79% of its 13F portfolio. Sunriver Management is also relatively very bullish on the stock, earmarking 9.73 percent of its 13F equity portfolio to SSNC.

As industrywide interest jumped, key money managers have been driving this bullishness. Junto Capital Management, managed by James Parsons, established the biggest position in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). Junto Capital Management had $108.3 million invested in the company at the end of the quarter. Mikal Patel’s Oribel Capital Management also made a $24.8 million investment in the stock during the quarter. The following funds were also among the new SSNC investors: Ben Gordon’s Blue Grotto Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s now take a look at hedge fund activity in other stocks similar to SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). These stocks are Teleflex Incorporated (NYSE:TFX), Domino’s Pizza, Inc. (NYSE:DPZ), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Pembina Pipeline Corp (NYSE:PBA), Western Digital Corporation (NASDAQ:WDC), Pool Corporation (NASDAQ:POOL), and Shinhan Financial Group Co., Ltd. (NYSE:SHG). This group of stocks’ market caps match SSNC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TFX 26 579122 -4
DPZ 36 2541766 5
JBHT 22 315309 -4
PBA 8 62632 -7
WDC 41 1103828 -16
POOL 40 1136320 0
SHG 6 31064 1
Average 25.6 824292 -3.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.6 hedge funds with bullish positions and the average amount invested in these stocks was $824 million. That figure was $2925 million in SSNC’s case. Western Digital Corporation (NASDAQ:WDC) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is more popular among hedge funds. Our overall hedge fund sentiment score for SSNC is 80.5. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on SSNC as the stock returned 10.3% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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