Is Sykes Enterprises, Incorporated (SYKE) A Good Stock To Buy?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Sykes Enterprises, Incorporated (NASDAQ:SYKE).

Sykes Enterprises, Incorporated (NASDAQ:SYKE) was in 16 hedge funds’ portfolios at the end of September. SYKE investors should pay attention to a decrease in hedge fund sentiment recently. There were 17 hedge funds in our database with SYKE holdings at the end of the previous quarter. At the end of this article we will also compare SYKE to other stocks including Loral Space & Communications Ltd. (NASDAQ:LORL), SPS Commerce, Inc. (NASDAQ:SPSC), and Cynosure, Inc. (NASDAQ:CYNO) to get a better sense of its popularity.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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How have hedgies been trading Sykes Enterprises, Incorporated (NASDAQ:SYKE)?

At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 6% dip from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SYKE over the last 5 quarters, which has remained very stable. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world has the biggest position in Sykes Enterprises, Incorporated (NASDAQ:SYKE), worth close to $21.9 million. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $14.6 million position. Some other peers with similar optimism encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David E. Shaw’s D E Shaw, and Joel Greenblatt’s Gotham Asset Management. We should note that none of these hedge funds are 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.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of all the investors watched by Insider Monkey, valued at close to $0.2 million in stock. Chuck Royce’s fund, Royce & Associates, also dumped its stock, about $0.1 million worth.

Let’s also examine hedge fund activity in other stocks similar to Sykes Enterprises, Incorporated (NASDAQ:SYKE). These stocks are Loral Space & Communications Ltd. (NASDAQ:LORL), SPS Commerce, Inc. (NASDAQ:SPSC), Cynosure, Inc. (NASDAQ:CYNO), and McDermott International (NYSE:MDR). This group of stocks’ market values are similar to SYKE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LORL 24 682723 1
SPSC 10 63081 -5
CYNO 24 166744 -1
MDR 25 109182 1

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $255 million. That figure was $62 million in SYKE’s case. McDermott International (NYSE:MDR) is the most popular stock in this table. On the other hand SPS Commerce, Inc. (NASDAQ:SPSC) is the least popular one with only 10 bullish hedge fund positions. Sykes Enterprises, Incorporated (NASDAQ:SYKE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MDR might be a better candidate to consider taking a long position in.

Disclosure: None