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

How do we determine whether Manhattan Associates, Inc. (NASDAQ:MANH) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.

Is Manhattan Associates, Inc. (NASDAQ:MANH) a sound investment right now? Prominent investors are selling. The number of long hedge fund bets that are revealed through the 13F filings were cut by 5 lately. MANH was in 16 hedge funds’ portfolios at the end of the third quarter of 2016. There were 21 hedge funds in our database with MANH holdings at the end of the previous quarter. At the end of this article we will also compare MANH to other stocks including Commerce Bancshares, Inc. (NASDAQ:CBSH), Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH), and Manpowergroup Inc (NYSE:MAN) 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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What does the smart money think about Manhattan Associates, Inc. (NASDAQ:MANH)?

At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a fall of 24% from the second quarter of 2016. On the other hand, there were a total of 23 hedge funds with a bullish position in MANH at the beginning of this year. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the largest position in Manhattan Associates, Inc. (NASDAQ:MANH), worth close to $93.7 million. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, which holds a $26.4 million position. Some other members of the smart money that hold long positions contain Israel Englander’s Millennium Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. 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.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually dropped their positions entirely. At the top of the heap, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners dropped the biggest position of the 700 funds tracked by Insider Monkey, worth an estimated $3.3 million in stock. Ken Griffin’s fund, Citadel Investment Group, also cut its call options, about $1.5 million worth.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Manhattan Associates, Inc. (NASDAQ:MANH) but similarly valued. We will take a look at Commerce Bancshares, Inc. (NASDAQ:CBSH), Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH), Manpowergroup Inc (NYSE:MAN), and Veeva Systems Inc (NYSE:VEEV). This group of stocks’ market caps resemble MANH’s market cap.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $326 million. That figure was $205 million in MANH’s case. Manpowergroup Inc (NYSE:MAN) is the most popular stock in this table. On the other hand Commerce Bancshares, Inc. (NASDAQ:CBSH) is the least popular one with only 8 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 MAN might be a better candidate to consider taking a long position in.

Disclosure: None