Hedge Funds Are Souring On Janus Henderson Group plc (JHG)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Janus Henderson Group plc (NYSE:JHG) based on those filings.

Janus Henderson Group plc (NYSE:JHG) investors should be aware of a decrease in hedge fund interest lately. Janus Henderson Group plc (NYSE:JHG) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistic is 30. Our calculations also showed that JHG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Nelson Peltz of Trian Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to review the latest hedge fund action regarding Janus Henderson Group plc (NYSE:JHG).

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

At Q2’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -21% from the first quarter of 2020. On the other hand, there were a total of 30 hedge funds with a bullish position in JHG a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Nelson Peltz’s Trian Partners has the number one position in Janus Henderson Group plc (NYSE:JHG), worth close to $823.7 million, corresponding to 9.6% of its total 13F portfolio. The second most bullish fund manager is Ariel Investments, managed by John W. Rogers, which holds a $147.9 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other peers with similar optimism include Ken Fisher’s Fisher Asset Management, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to Janus Henderson Group plc (NYSE:JHG), around 9.63% of its 13F portfolio. Ariel Investments is also relatively very bullish on the stock, earmarking 1.39 percent of its 13F equity portfolio to JHG.

Seeing as Janus Henderson Group plc (NYSE:JHG) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there were a few hedge funds that elected to cut their full holdings by the end of the second quarter. It’s worth mentioning that Frank Fu’s CaaS Capital dropped the largest position of the “upper crust” of funds watched by Insider Monkey, totaling about $10.9 million in stock. Claes Fornell’s fund, CSat Investment Advisory, also sold off its stock, about $0.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds by the end of the second quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Janus Henderson Group plc (NYSE:JHG) but similarly valued. These stocks are Acuity Brands, Inc. (NYSE:AYI), Prosperity Bancshares, Inc. (NYSE:PB), ShockWave Medical, Inc. (NASDAQ:SWAV), Tetra Tech, Inc. (NASDAQ:TTEK), Choice Hotels International, Inc. (NYSE:CHH), SLM Corp (NASDAQ:SLM), and Redfin Corporation (NASDAQ:RDFN). All of these stocks’ market caps are closest to JHG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $440 million. That figure was $1204 million in JHG’s case. Acuity Brands, Inc. (NYSE:AYI) is the most popular stock in this table. On the other hand Choice Hotels International, Inc. (NYSE:CHH) is the least popular one with only 15 bullish hedge fund positions. Janus Henderson Group plc (NYSE:JHG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JHG is 40.4. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on JHG as the stock returned 17.2% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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