Hedge Funds Are Buying SEI Investments Company (SEIC)

In this article you are going to find out whether hedge funds think SEI Investments Company (NASDAQ:SEIC) 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 SEI Investments Company (NASDAQ:SEIC) a bargain? Prominent investors were taking an optimistic view. The number of bullish hedge fund bets rose by 2 recently. SEI Investments Company (NASDAQ:SEIC) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 37. Our calculations also showed that SEIC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a glance at the new hedge fund action regarding SEI Investments Company (NASDAQ:SEIC).

Tom Gayner of Markel Gayner Asset Management

Do Hedge Funds Think SEIC Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SEIC over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Royce & Associates was the largest shareholder of SEI Investments Company (NASDAQ:SEIC), with a stake worth $83.1 million reported as of the end of September. Trailing Royce & Associates was Millennium Management, which amassed a stake valued at $45.9 million. AQR Capital Management, Arrowstreet Capital, and Markel Gayner Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sunriver Management allocated the biggest weight to SEI Investments Company (NASDAQ:SEIC), around 2.5% of its 13F portfolio. Goodnow Investment Group is also relatively very bullish on the stock, designating 1.65 percent of its 13F equity portfolio to SEIC.

As aggregate interest increased, key money managers were breaking ground themselves. Tudor Investment Corp, managed by Paul Tudor Jones, established the largest position in SEI Investments Company (NASDAQ:SEIC). Tudor Investment Corp had $3.9 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.7 million position during the quarter. The other funds with new positions in the stock are Greg Eisner’s Engineers Gate Manager and Matthew L Pinz’s Pinz Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SEI Investments Company (NASDAQ:SEIC) but similarly valued. We will take a look at DigitalOcean Holdings, Inc. (NYSE:DOCN), BanColombia S.A. (NYSE:CIB), Mobile TeleSystems Public Joint Stock Company (NYSE:MBT), Organon & Co. (NYSE:OGN), Ternium S.A. (NYSE:TX), United Therapeutics Corporation (NASDAQ:UTHR), and AGNC Investment Corp. (NASDAQ:AGNC). All of these stocks’ market caps resemble SEIC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $559 million. That figure was $330 million in SEIC’s case. United Therapeutics Corporation (NASDAQ:UTHR) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 3 bullish hedge fund positions. SEI Investments Company (NASDAQ:SEIC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SEIC is 51.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately SEIC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SEIC were disappointed as the stock returned 2.8% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.