Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Science Applications International Corp (NYSE:SAIC) undervalued? Prominent investors are getting less bullish. The number of long hedge fund investments were cut by 1 recently. SAIC was in 15 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with SAIC holdings at the end of the previous quarter. At the end of this article we will also compare SAIC to other stocks including United Bankshares, Inc. (NASDAQ:UBSI), Sunstone Hotel Investors Inc (NYSE:SHO), and Methanex Corporation (USA) (NASDAQ:MEOH) to get a better sense of its popularity.
Follow Science Applications International Corp (NYSE:SAIC)
Follow Science Applications International Corp (NYSE:SAIC)
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How have hedgies been trading Science Applications International Corp (NYSE:SAIC)?
Heading into the fourth quarter of 2016, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 6% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards SAIC over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Joe Huber’s Huber Capital Management has the biggest position in Science Applications International Corp (NYSE:SAIC), worth close to $41.4 million, amounting to 1.6% of its total 13F portfolio. On Huber Capital Management’s heels is AQR Capital Management, led by Cliff Asness, holding a $15.6 million position. Other hedge funds and institutional investors with similar optimism consist of John D. Gillespie’s Prospector Partners, Robert B. Gillam’s McKinley Capital Management and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as Science Applications International Corp (NYSE:SAIC) has sustained declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few money managers that elected to cut their full holdings by the end of the third quarter. At the top of the heap, John Overdeck and David Siegel’s Two Sigma Advisors dropped the largest stake of all the investors tracked by Insider Monkey, totaling close to $1.3 million in stock. Paul Tudor Jones’ fund, Tudor Investment Corp, also dropped its stock, about $1.2 million worth.
Let’s now review hedge fund activity in other stocks similar to Science Applications International Corp (NYSE:SAIC). These stocks are United Bankshares, Inc. (NASDAQ:UBSI), Sunstone Hotel Investors Inc (NYSE:SHO), Methanex Corporation (USA) (NASDAQ:MEOH), and Manchester United PLC (NYSE:MANU). This group of stocks’ market caps are closest to SAIC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UBSI | 8 | 38600 | 2 |
| SHO | 7 | 22255 | -2 |
| MEOH | 17 | 107936 | 7 |
| MANU | 7 | 108652 | -2 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. That figure was $80 million in SAIC’s case. Methanex Corporation (USA) (NASDAQ:MEOH) is the most popular stock in this table. On the other hand Sunstone Hotel Investors Inc (NYSE:SHO) is the least popular one with only 7 bullish hedge fund positions. Science Applications International Corp (NYSE:SAIC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MEOH might be a better candidate to consider taking a long position in.
Disclosure: None
