Hedge Funds Are Betting On Insight Enterprises, Inc. (NSIT)

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 Insight Enterprises, Inc. (NASDAQ:NSIT) a buy here? Hedge funds are becoming hopeful. NSIT was in 20 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with NSIT holdings at the end of the previous quarter. At the end of this article we will also compare NSIT to other stocks including Navistar International Corp (NYSE:NAV), Integer Holdings Corporation (NYSE:ITGR), and Eros International plc (NYSE:EROS) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Hedge fund activity in Insight Enterprises, Inc. (NASDAQ:NSIT)

At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 33% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards NSIT over the last 5 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Richard S. Pzena’s Pzena Investment Management has the largest position in Insight Enterprises, Inc. (NASDAQ:NSIT), worth close to $39.8 million. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $10.8 million position. Other professional money managers that hold long positions encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Martin Whitman’s Third Avenue Management and D. E. Shaw’s D E Shaw. 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.

As aggregate interest increased, key hedge funds have been driving this bullishness. Citadel Investment Group, led by Ken Griffin, created the largest position in Insight Enterprises, Inc. (NASDAQ:NSIT). Citadel Investment Group had $1.2 million invested in the company at the end of the quarter. Mike Vranos’ Ellington also initiated a $0.4 million position during the quarter. The other funds with brand new NSIT positions are Matthew Tewksbury’s Stevens Capital Management, Neil Chriss’ Hutchin Hill Capital, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Insight Enterprises, Inc. (NASDAQ:NSIT) but similarly valued. We will take a look at Navistar International Corp (NYSE:NAV), Integer Holdings Corporation (NYSE:ITGR), Eros International plc (NYSE:EROS), and ScanSource, Inc. (NASDAQ:SCSC). This group of stocks’ market caps resemble NSIT’s market cap.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $290 million. That figure was $84 million in NSIT’s case. Navistar International Corp (NYSE:NAV) is the most popular stock in this table. On the other hand Eros International plc (NYSE:EROS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Insight Enterprises, Inc. (NASDAQ:NSIT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None