In a move that increased the exposure of Larry Robbins‘ Glenview Capital to the industrials sector, the fund hiked its stake in the $7.15 billion provider of workforce solutions, ManpowerGroup Inc. (NYSE:MAN), by almost 150% according to a recent 13G form filed with the Securities and Exchange Commission. The current holding amounts to 5.67 million shares and has a value of $520.22 million, according to the stock price at the time of publication. It represents about 7.24% of the company’s outstanding stock.
Before establishing Glenview Capital in 2001, Larry Robbins worked for veteran investor Leon Cooperman’s Omega Advisors. The market value of Robbins’ fund’s public equity portfolio stood at $21.90 billion at the end of March, with 36% of the value of its holdings in the healthcare sector.
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But why do we track the hedge fund activities? From one point of view you could argue that hedge funds are consistently under-performing when it comes to net returns over the last three years when compared to the S&P 500. But that doesn’t mean that we should completely neglect hedge funds’ picks; on the contrary. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. A small-cap approach, which includes the top 15 small-cap stock picks of the best hedge fund managers, consistently outperformed the S&P 500 since August 2012. These stocks have returned 142% so far since the launch of the Insider Monkey small-cap strategy in August 2012, whereas the S&P 500 managed to return less than 60% during that time (see the details). This is the primary reason behind our emphasis on hedge fund activity and sentiment.
The smart money in general is also bullish on ManpowerGroup Inc. (NYSE:MAN), as its popularity among the hedge funds that we track increased considerably during the first quarter. A total of 33 firms had an aggregate investment of $774.37 million in the company at the end of March, as compared to 28 funds with $439.31 million at the end of the previous quarter. Aside from Glenview Capital, Chuck Royce‘s Royce & Associates, and Cliff Asness‘ AQR Capital Management are the largest stockholders of ManpowerGroup Inc. (NYSE:MAN) among these firms, with respective stakes of 1.18 million shares valued at $102.01 million and 1.01 million shares valued at $87.41 million.
Although up by a modest 9.46% over the past year, ManpowerGroup Inc. (NYSE:MAN)’s stock has delivered large gains of 34.12% year-to-date. In comparison, the staffing & outsourcing services industry has appreciated by 20.36% over the last 12 months, but only 7.82% so far this year. Currently, the stock is trading at a trailing twelve month earnings multiple of 17.41% as compared to the industry’s average of 30.18. This has resulted in a PEG ratio of 1.75. The company’s trailing twelve month return on investment of 11.21 also exceeds the industry’s average of 7.02.