Manpowergroup Inc (MAN) Fell Out Of Favor With Hedge Funds

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Manpowergroup Inc (NYSE:MAN).

Manpowergroup Inc (NYSE:MAN) has experienced a decrease in enthusiasm from smart money of late. Manpowergroup Inc (NYSE:MAN) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 34. There were 27 hedge funds in our database with MAN holdings at the end of June. Our calculations also showed that MAN 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. Keeping this in mind let’s review the recent hedge fund action surrounding Manpowergroup Inc (NYSE:MAN).

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

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

Heading into the fourth quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MAN over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the biggest position in Manpowergroup Inc (NYSE:MAN), worth close to $92.7 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which holds a $51.7 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions encompass Israel Englander’s Millennium Management, Noam Gottesman’s GLG Partners and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Arjuna Capital allocated the biggest weight to Manpowergroup Inc (NYSE:MAN), around 0.66% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, setting aside 0.59 percent of its 13F equity portfolio to MAN.

Because Manpowergroup Inc (NYSE:MAN) has faced a decline in interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies who sold off their entire stakes in the third quarter. Intriguingly, Louis Bacon’s Moore Global Investments dropped the largest stake of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $10 million in call options, and D. E. Shaw’s D E Shaw was right behind this move, as the fund dropped about $2.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Manpowergroup Inc (NYSE:MAN) but similarly valued. These stocks are Autohome Inc (NYSE:ATHM), Sonoco Products Company (NYSE:SON), Vicor Corp (NASDAQ:VICR), Graphic Packaging Holding Company (NYSE:GPK), Cazoo Group Ltd (NYSE:CZOO), Louisiana-Pacific Corporation (NYSE:LPX), and ZIM Integrated Shipping Services Ltd. (NYSE:ZIM). This group of stocks’ market caps are similar to MAN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATHM 11 173382 -5
SON 16 131631 1
VICR 13 266143 0
GPK 28 609921 1
CZOO 32 312211 32
LPX 36 670576 -3
ZIM 22 552565 -3
Average 22.6 388061 3.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.6 hedge funds with bullish positions and the average amount invested in these stocks was $388 million. That figure was $316 million in MAN’s case. Louisiana-Pacific Corporation (NYSE:LPX) is the most popular stock in this table. On the other hand Autohome Inc (NYSE:ATHM) is the least popular one with only 11 bullish hedge fund positions. Manpowergroup Inc (NYSE:MAN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MAN is 56.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately MAN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MAN were disappointed as the stock returned -12.3% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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