In this article you are going to find out whether hedge funds think Genpact Limited (NYSE:G) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Genpact Limited (NYSE:G) a buy, sell, or hold? Money managers were getting less optimistic. The number of long hedge fund bets were cut by 1 recently. Genpact Limited (NYSE:G) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that G isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 23 hedge funds in our database with G holdings at the end of March.
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Jim Simons of Renaissance Technologies
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Do Hedge Funds Think G Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards G over the last 24 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the largest position in Genpact Limited (NYSE:G), worth close to $64.4 million, comprising 0.1% of its total 13F portfolio. On Arrowstreet Capital’s heels is James Parsons of Junto Capital Management, with a $62.4 million position; 2% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish contain Richard S. Pzena’s Pzena Investment Management, Israel Englander’s Millennium Management and Gifford Combs’s Dalton Investments. In terms of the portfolio weights assigned to each position Dalton Investments allocated the biggest weight to Genpact Limited (NYSE:G), around 8.22% of its 13F portfolio. Old Well Partners is also relatively very bullish on the stock, designating 3.15 percent of its 13F equity portfolio to G.
Judging by the fact that Genpact Limited (NYSE:G) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there were a few fund managers that elected to cut their entire stakes in the second quarter. At the top of the heap, Renaissance Technologies dumped the largest position of the 750 funds monitored by Insider Monkey, worth close to $12.9 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund sold off about $2.2 million worth. These transactions are interesting, as total hedge fund interest was cut by 1 funds in the second quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Genpact Limited (NYSE:G) but similarly valued. We will take a look at TFI International Inc. (NYSE:TFII), Under Armour Inc (NYSE:UA), Huntington Ingalls Industries Inc (NYSE:HII), Jefferies Financial Group Inc. (NYSE:JEF), Advanced Drainage Systems Inc. (NYSE:WMS), Arrow Electronics, Inc. (NYSE:ARW), and Polaris Inc. (NYSE:PII). All of these stocks’ market caps are similar to G’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TFII | 13 | 101129 | -6 |
| UA | 51 | 1786550 | 0 |
| HII | 21 | 153435 | 1 |
| JEF | 29 | 698210 | -9 |
| WMS | 26 | 1337049 | -3 |
| ARW | 30 | 711641 | 7 |
| PII | 20 | 464211 | -9 |
| Average | 27.1 | 750318 | -2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $750 million. That figure was $234 million in G’s case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand TFI International Inc. (NYSE:TFII) is the least popular one with only 13 bullish hedge fund positions. Genpact Limited (NYSE:G) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for G is 33.2. 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 October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on G as the stock returned 12.4% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
Follow Genpact Ltd (NYSE:G)
Follow Genpact Ltd (NYSE:G)
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Disclosure: None. This article was originally published at Insider Monkey.
