Robert Half International Inc. (RHI): Hedge Fund Sentiment Unchanged

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 Robert Half International Inc. (NYSE:RHI).

Robert Half International Inc. (NYSE:RHI) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 27 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that RHI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Natera Inc (NASDAQ:NTRA), Churchill Downs Incorporated (NASDAQ:CHDN), and Kingsoft Cloud Holdings Limited (NASDAQ:KC) to gather more data points.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Michael Gelband of ExodusPoint Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. 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 homepage. Keeping this in mind let’s take a gander at the latest hedge fund action regarding Robert Half International Inc. (NYSE:RHI).

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

At the end of the first quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards RHI over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, AQR Capital Management was the largest shareholder of Robert Half International Inc. (NYSE:RHI), with a stake worth $155.3 million reported as of the end of March. Trailing AQR Capital Management was Millennium Management, which amassed a stake valued at $34.1 million. Renaissance Technologies, Prospector Partners, and Adage Capital Management 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 Prospector Partners allocated the biggest weight to Robert Half International Inc. (NYSE:RHI), around 1.37% of its 13F portfolio. AQR Capital Management is also relatively very bullish on the stock, designating 0.25 percent of its 13F equity portfolio to RHI.

Since Robert Half International Inc. (NYSE:RHI) has witnessed declining sentiment from the smart money, we can see that there exists a select few money managers that elected to cut their positions entirely in the first quarter. It’s worth mentioning that Brandon Haley’s Holocene Advisors sold off the largest investment of all the hedgies followed by Insider Monkey, totaling close to $2.9 million in stock, and William B. Gray’s Orbis Investment Management was right behind this move, as the fund dumped about $2.4 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Robert Half International Inc. (NYSE:RHI) but similarly valued. We will take a look at Natera Inc (NASDAQ:NTRA), Churchill Downs Incorporated (NASDAQ:CHDN), Kingsoft Cloud Holdings Limited (NASDAQ:KC), Alleghany Corporation (NYSE:Y), SEI Investments Company (NASDAQ:SEIC), Amedisys Inc (NASDAQ:AMED), and Gentex Corporation (NASDAQ:GNTX). This group of stocks’ market valuations are similar to RHI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NTRA 41 1222395 -5
CHDN 19 413255 -6
KC 16 92226 -4
Y 34 359891 0
SEIC 27 304623 -6
AMED 26 324073 6
GNTX 35 537554 -1
Average 28.3 464860 -2.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.3 hedge funds with bullish positions and the average amount invested in these stocks was $465 million. That figure was $285 million in RHI’s case. Natera Inc (NASDAQ:NTRA) is the most popular stock in this table. On the other hand Kingsoft Cloud Holdings Limited (NASDAQ:KC) is the least popular one with only 16 bullish hedge fund positions. Robert Half International Inc. (NYSE:RHI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RHI is 54.9. 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. 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 24% in 2021 through July 9th and beat the market by 6.7 percentage points. A small number of hedge funds were also right about betting on RHI, though not to the same extent, as the stock returned 13.8% since the end of Q1 (through July 9th) and outperformed the market.

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