Is FactSet Research Systems Inc. (NYSE:FDS) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is FactSet Research Systems Inc. (NYSE:FDS) ready to rally soon? Money managers were in a pessimistic mood. The number of bullish hedge fund bets decreased by 2 recently. FactSet Research Systems Inc. (NYSE:FDS) was in 28 hedge funds’ portfolios at the end of June. The all time high for this statistic is 30. Our calculations also showed that FDS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the eyes of most shareholders, hedge funds are assumed to be slow, outdated financial vehicles of years past. While there are more than 8000 funds with their doors open today, Our researchers look at the elite of this club, around 850 funds. Most estimates calculate that this group of people command most of the smart money’s total asset base, and by paying attention to their best equity investments, Insider Monkey has discovered several investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Tom Gayner of Markel Gayner Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. With all of this in mind we’re going to review the key hedge fund action surrounding FactSet Research Systems Inc. (NYSE:FDS).
Do Hedge Funds Think FDS Is A Good Stock To Buy Now?
At the end of June, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in FDS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Greg Poole’s Echo Street Capital Management has the number one position in FactSet Research Systems Inc. (NYSE:FDS), worth close to $216.3 million, accounting for 1.7% of its total 13F portfolio. The second largest stake is held by Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $44.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions consist of Israel Englander’s Millennium Management, Tom Gayner’s Markel Gayner Asset Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Echo Street Capital Management allocated the biggest weight to FactSet Research Systems Inc. (NYSE:FDS), around 1.67% of its 13F portfolio. Markel Gayner Asset Management is also relatively very bullish on the stock, dishing out 0.5 percent of its 13F equity portfolio to FDS.
Due to the fact that FactSet Research Systems Inc. (NYSE:FDS) has witnessed bearish sentiment from the smart money, it’s easy to see that there exists a select few funds that elected to cut their positions entirely in the second quarter. It’s worth mentioning that Renaissance Technologies sold off the biggest stake of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $5.1 million in stock, and Qing Li’s Sciencast Management was right behind this move, as the fund dropped about $2.6 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds in the second quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as FactSet Research Systems Inc. (NYSE:FDS) but similarly valued. We will take a look at Quanta Services Inc (NYSE:PWR), Steel Dynamics, Inc. (NASDAQ:STLD), Fidelity National Financial Inc (NYSE:FNF), Atmos Energy Corporation (NYSE:ATO), Guardant Health, Inc. (NASDAQ:GH), The Boston Beer Company Inc (NYSE:SAM), and American Homes 4 Rent (NYSE:AMH). This group of stocks’ market values resemble FDS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PWR | 40 | 945202 | 7 |
| STLD | 26 | 538358 | 0 |
| FNF | 34 | 1303820 | -5 |
| ATO | 18 | 83813 | 3 |
| GH | 49 | 1708966 | 8 |
| SAM | 42 | 933501 | 13 |
| AMH | 31 | 757590 | 4 |
| Average | 34.3 | 895893 | 4.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.3 hedge funds with bullish positions and the average amount invested in these stocks was $896 million. That figure was $491 million in FDS’s case. Guardant Health, Inc. (NASDAQ:GH) is the most popular stock in this table. On the other hand Atmos Energy Corporation (NYSE:ATO) is the least popular one with only 18 bullish hedge fund positions. FactSet Research Systems Inc. (NYSE:FDS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FDS is 47.1. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on FDS as the stock returned 23.9% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.
Follow Factset Research Systems Inc (NYSE:FDS)
Follow Factset Research Systems Inc (NYSE:FDS)
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Disclosure: None. This article was originally published at Insider Monkey.
