Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ recent losses in Facebook. Let’s take a closer look at what the funds we track think about Sykes Enterprises, Incorporated (NASDAQ:SYKE) in this article.
Sykes Enterprises, Incorporated (NASDAQ:SYKE) investors should pay attention to an increase in hedge fund interest of late. Our calculations also showed that SYKE isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s view the new hedge fund action encompassing Sykes Enterprises, Incorporated (NASDAQ:SYKE).
What have hedge funds been doing with Sykes Enterprises, Incorporated (NASDAQ:SYKE)?
At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the second quarter of 2018. By comparison, 17 hedge funds held shares or bullish call options in SYKE heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Sykes Enterprises, Incorporated (NASDAQ:SYKE) was held by Renaissance Technologies, which reported holding $18.6 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $12 million position. Other investors bullish on the company included AQR Capital Management, Citadel Investment Group, and GLG Partners.
As aggregate interest increased, some big names have jumped into Sykes Enterprises, Incorporated (NASDAQ:SYKE) headfirst. Millennium Management, managed by Israel Englander, established the largest position in Sykes Enterprises, Incorporated (NASDAQ:SYKE). Millennium Management had $1.4 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.4 million position during the quarter. The only other fund with a new position in the stock is Joel Greenblatt’s Gotham Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Sykes Enterprises, Incorporated (NASDAQ:SYKE). These stocks are BlackRock Credit All Inc Trust IV (NYSE:BTZ), Celestica Inc. (NYSE:CLS), Heritage Financial Corporation (NASDAQ:HFWA), and Mammoth Energy Services, Inc. (NASDAQ:TUSK). This group of stocks’ market caps resemble SYKE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BTZ | 3 | 12330 | 0 |
| CLS | 17 | 195976 | 3 |
| HFWA | 6 | 71799 | -8 |
| TUSK | 20 | 698342 | 1 |
| Average | 11.5 | 244612 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $245 million. That figure was $52 million in SYKE’s case. Mammoth Energy Services, Inc. (NASDAQ:TUSK) is the most popular stock in this table. On the other hand BlackRock Credit All Inc Trust IV (NYSE:BTZ) is the least popular one with only 3 bullish hedge fund positions. Sykes Enterprises, Incorporated (NASDAQ:SYKE) 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 TUSK might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
