Hedge Funds Are Buying Manhattan Associates, Inc. (MANH)

Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds love, lost 50% during the last 12 months ending October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns. Our data shows that the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index as a whole. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Manhattan Associates, Inc. (NASDAQ:MANH).

Is Manhattan Associates, Inc. (NASDAQ:MANH) going to take off soon? Hedge funds are becoming hopeful. The number of bullish hedge fund positions moved up by 6 in recent months. At the end of this article we will also compare MANH to other stocks including Empire State Realty Trust Inc (NYSE:ESRT), Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR), and Howard Hughes Corp (NYSE:HHC) to get a better sense of its popularity.

In today’s marketplace there are many tools stock market investors put to use to evaluate publicly traded companies. Some of the most underrated tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce the broader indices by a solid margin (see the details here).

Keeping this in mind, we’re going to view the recent action encompassing Manhattan Associates, Inc. (NASDAQ:MANH).

What have hedge funds been doing with Manhattan Associates, Inc. (NASDAQ:MANH)?

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 43% burst from the second quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially (or had already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the most valuable position in Manhattan Associates, Inc. (NASDAQ:MANH), worth close to $132.4 million, corresponding to 0.3% of its total 13F portfolio. Sitting in the 2 spot is Select Equity Group, led by Robert Joseph Caruso, holding a $21.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions contain Cliff Asness’ AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Legg Mason Capital Management, now a part of ClearBridge.

Consequently, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, assembled the biggest position in Manhattan Associates, Inc. (NASDAQ:MANH). Millennium Management had $6.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $2 million position during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, Peter Muller’s PDT Partners, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Let’s check out hedge fund activity in other stocks similar to Manhattan Associates, Inc. (NASDAQ:MANH). We will take a look at Empire State Realty Trust Inc (NYSE:ESRT), Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR), Howard Hughes Corp (NYSE:HHC), and Legg Mason, Inc. (NYSE:LM). This group of stocks’ market valuations are similar to MANH’s market valuation.

As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $685 million. That figure was $225 million in MANH’s case. Howard Hughes Corp (NYSE:HHC) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR) is the least popular one with only 6 bullish hedge fund positions. Manhattan Associates, Inc. (NASDAQ:MANH) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HHC might be a better candidate to consider for a long position.