Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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

Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards On Assignment, Inc. (NYSE:ASGN).

Is On Assignment, Inc. (NYSE:ASGN) ready to rally soon? Hedge funds are becoming less confident. The number of long hedge fund positions went down by 4 in recent months. At the end of this article we will also compare ASGN to other stocks, including Demandware Inc (NYSE:DWRE), The Advisory Board Company (NASDAQ:ABCO), and SemGroup Corp (NYSE:SEMG) to get a better sense of its popularity.

Follow Asgn Inc (NYSE:ASGN)
Trade (NYSE:ASGN) Now!

To the average investor there are dozens of formulas stock traders use to analyze publicly traded companies. A duo of the less known formulas are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the top fund managers can beat the market by a healthy margin (see the details here).

With all of this in mind, we’re going to take a gander at the key action surrounding On Assignment, Inc. (NYSE:ASGN).

What have hedge funds been doing with On Assignment, Inc. (NYSE:ASGN)?

At the Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Mariko Gordon’s Daruma Asset Management has the number one position in On Assignment, Inc. (NYSE:ASGN), worth close to $51.5 million, comprising 3.2% of its total 13F portfolio. Coming in second is Douglas Dossey and Arthur Young’s Tensile Capital, with a $30.7 million position; 9.2% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions consist of Ira Unschuld’s Brant Point Investment Management, Chuck Royce’s Royce & Associates and Steve Cohen’s Point72 Asset Management.

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.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.