Xerox Corporation (XRX), On Assignment, Inc. (ASGN) & More: Why You Should Take a Closer Look at These Stocks

Hedge funds’ reputation has been impaired mostly due to high fees and the underperformance on the short-side of their portfolios, which provide downside protection but have dragged down overall returns. We recommend investors consider hedge funds’ long stock picks for their market-beating potential. 659 funds in our system which filed for the June 30 13F reporting period held long positions in at least five non-micro-cap stocks, and those funds’ long bets posted 8.3% gains in the third-quarter based on the size of their positions on June 30. That easily topped the performance of S&P 500 ETFs, which returned only 3.3% in the same period.

One of the funds that we follow at Insider Monkey is Tensile Capital, managed by Douglas Dossey and Arthur Young. The fund reported an equity portfolio worth $443.52 million as of the end of September, with almost half invested in tech stocks. According to our calculations, out of the fund’s total long positions, 13 holdings in companies with market caps above $1.0 billion posted a weighted average return of 12.35% in the third quarter. In this article we will take a look at the fund’s exposure to Expeditors International of Washington (NASDAQ:EXPD), On Assignment, Inc. (NYSE:ASGN), InterXion Holding NV (NYSE:INXN), and Xerox Corporation (NYSE:XRX).

Tensile Capital had 761,015 shares of Expeditors International of Washington (NASDAQ:EXPD) worth $39.21 million heading into the fourth quarter. Meanwhile, the stock returned 5.1% during the period. At the end of the second quarter, 20 funds tracked by Insider Monkey were bullish on this stock, down by 13% over the quarter. Among these stocks, Select Equity Group was the largest shareholder of Expeditors International of Washington (NASDAQ:EXPD), with a stake worth $292.5 million reported as of the end of June. Trailing Select Equity Group was International Value Advisers, which amassed a stake valued at $152.1 million. Gotham Asset Management and Royce & Associates also held valuable positions in the company.

Tensile Capital increased its stake in On Assignment, Inc. (NYSE:ASGN) by 3% to 903,178 shares worth $32.77 million during the second quarter. The investor acquired more shares as the stock lost 1.8% between July and September. Overall, there were 18 funds from our database long On Assignment at the end of June, up by one fund over the quarter. More specifically, Daruma Asset Management was the largest chareholder of On Assignment, Inc. (NYSE:ASGN), with a stake worth $45.2 millions reported as of the end of June. Incline Global Management, Royce & Associates, and Brant Point Investment Management also held valuable positions in the company.

In InterXion Holding NV (NYSE:INXN), Tensile Capital held 547,400 shares worth $19.83 million at the end of September, as the stock declined by 1.8% during the third quarter. The number of funds from our database long the stock went down by three to 35 during the second quarter, while the largest stake was held by Eminence Capital, which reported ownership of $167 million worth of stock as of the end of June. On the second spot was Alyeska Investment Group which amassed $92.2 million worth of shares. Moreover, Millennium Management, D E Shaw, and Rivulet Capital were also bullish on InterXion Holding NV (NYSE:INXN).

As Xerox Corporation (NYSE:XRX)’s stock advanced by 7.6% during the third quarter, Tensile kept its position in the company unchanged and held 964,145 shares valued at $9.78 million at the end of September. Xerox is one of Tensile’s long-term bets as the fund has held shares since the last quarter of 2013. At the end of June, the fund was among 31 investors tracked by Insider Monkey that amassed shares of Xerox, compared to 29 funds a quarter earlier. More specifically, Icahn Capital LP, managed by Carl Icahn, held the largest stake in Xerox Corporation (NYSE:XRX), which was worth $939.8 million at the end of June.  Sitting at the No. 2 spot was AQR Capital Management, led by Cliff Asness, which held a $117.9 million position. Remaining professional money managers with similar optimism included Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Anand Parekh’s Alyeska Investment Group and David Harding’s Winton Capital Management.

Disclosure: none