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Should You Avoid On Assignment, Inc. (ASGN)?

Judging by the fact that On Assignment, Inc. (NYSE:ASGN) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of money managers that elected to cut their positions entirely by the end of the third quarter. Intriguingly, Israel Englander’s Millennium Management cut the largest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $9.7 million in stock, and Glenn Russell Dubin’s Highbridge Capital Management was right behind this move, as the fund dumped about $3.2 million worth of shares. These transactions are interesting, as aggregate hedge fund interest was cut by 4 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as On Assignment, Inc. (NYSE:ASGN) but similarly valued. These stocks are Demandware Inc (NYSE:DWRE), The Advisory Board Company (NASDAQ:ABCO), SemGroup Corp (NYSE:SEMG), and Patterson-UTI Energy, Inc. (NASDAQ:PTEN). This group of stocks’ market caps are closest to ASGN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DWRE 12 70061 -3
ABCO 11 172431 -4
SEMG 26 382539 3
PTEN 25 345564 -10

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $243 million. That figure was $143 million in ASGN’s case. SemGroup Corp (NYSE:SEMG) is the most popular stock in this table. On the other hand The Advisory Board Company (NASDAQ:ABCO) is the least popular one with only 11 bullish hedge fund positions. On Assignment, Inc. (NYSE:ASGN) 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 SEMG might be a better candidate to consider a long position.

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