Hedge Funds Are Buying WNS (Holdings) Limited (WNS)

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards WNS (Holdings) Limited (NYSE:WNS) to find out whether there were any major changes in hedge funds’ views.

Is WNS (Holdings) Limited (NYSE:WNS) a buy right now? Prominent investors were becoming more confident. The number of bullish hedge fund bets improved by 1 recently. WNS (Holdings) Limited (NYSE:WNS) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that WNS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 20 hedge funds in our database with WNS positions at the end of the second quarter.

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. Keeping this in mind let’s analyze the fresh hedge fund action surrounding WNS (Holdings) Limited (NYSE:WNS).

Noam Gottesman of GLG Partners

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

Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WNS over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Renaissance Technologies has the biggest position in WNS (Holdings) Limited (NYSE:WNS), worth close to $75.7 million, accounting for 0.1% of its total 13F portfolio. The second most bullish fund manager is GLG Partners, led by Noam Gottesman, holding a $45.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Israel Englander’s Millennium Management, Terry Smith’s Fundsmith LLP and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Old Well Partners allocated the biggest weight to WNS (Holdings) Limited (NYSE:WNS), around 4.09% of its 13F portfolio. Intrepid Capital Management is also relatively very bullish on the stock, dishing out 3.62 percent of its 13F equity portfolio to WNS.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. SG Capital Management, managed by Ken Grossman and Glen Schneider, initiated the most outsized position in WNS (Holdings) Limited (NYSE:WNS). SG Capital Management had $0.4 million invested in the company at the end of the quarter. Mark Coe’s Intrinsic Edge Capital also initiated a $0.4 million position during the quarter. The other funds with brand new WNS positions are Greg Eisner’s Engineers Gate Manager and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as WNS (Holdings) Limited (NYSE:WNS) but similarly valued. These stocks are Grand Canyon Education Inc (NASDAQ:LOPE), Skillz Inc. (NYSE:SKLZ), Southwest Gas Holdings, Inc. (NYSE:SWX), Korn Ferry (NYSE:KFY), Broadstone Net Lease, Inc. (NYSE:BNL), 1Life Healthcare, Inc. (NASDAQ:ONEM), and VIZIO Holding Corp. (NYSE:VZIO). All of these stocks’ market caps resemble WNS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $258 million. That figure was $221 million in WNS’s case. 1Life Healthcare, Inc. (NASDAQ:ONEM) is the most popular stock in this table. On the other hand Broadstone Net Lease, Inc. (NYSE:BNL) is the least popular one with only 7 bullish hedge fund positions. WNS (Holdings) Limited (NYSE:WNS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WNS is 59.3. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on WNS as the stock returned 7.8% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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