How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Janus Henderson Group plc (NYSE:JHG).
Is Janus Henderson Group plc (NYSE:JHG) the right pick for your portfolio? Investors who are in the know were betting on the stock. The number of bullish hedge fund positions advanced by 2 recently. Janus Henderson Group plc (NYSE:JHG) was in 24 hedge funds’ portfolios at the end of September. 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 Q3 rankings). There were 22 hedge funds in our database with JHG holdings at the end of June.
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. Now we’re going to take a peek at the new hedge fund action encompassing Janus Henderson Group plc (NYSE:JHG).
Do Hedge Funds Think JHG Is A Good Stock To Buy Now?
At the end of September, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in JHG over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Trian Partners, managed by Nelson Peltz, holds the largest position in Janus Henderson Group plc (NYSE:JHG). Trian Partners has a $979.6 million position in the stock, comprising 12.2% of its 13F portfolio. The second largest stake is held by Ariel Investments, led by John W. Rogers, holding a $133 million position; 1.2% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism contain Ken Griffin’s Citadel Investment Group, Ken Fisher’s Fisher Asset Management and Louis Bacon’s Moore Global Investments. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to Janus Henderson Group plc (NYSE:JHG), around 12.18% of its 13F portfolio. Ariel Investments is also relatively very bullish on the stock, dishing out 1.22 percent of its 13F equity portfolio to JHG.
As one would reasonably expect, some big names have been driving this bullishness. Royce & Associates, managed by Chuck Royce, created the largest position in Janus Henderson Group plc (NYSE:JHG). Royce & Associates had $2.6 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $2.2 million investment in the stock during the quarter. The following funds were also among the new JHG investors: Peter Algert’s Algert Global, Mika Toikka’s AlphaCrest Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review 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 Stifel Financial Corp. (NYSE:SF), Donaldson Company, Inc. (NYSE:DCI), Workiva Inc (NYSE:WK), Tenet Healthcare Corp (NYSE:THC), RLX Technology Inc. (NYSE:RLX), Boyd Gaming Corporation (NYSE:BYD), and Kohl’s Corporation (NYSE:KSS). This group of stocks’ market values are closest to JHG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SF | 20 | 443560 | -4 |
| DCI | 25 | 247320 | 4 |
| WK | 23 | 582753 | 2 |
| THC | 47 | 1905111 | 8 |
| RLX | 11 | 251879 | -1 |
| BYD | 37 | 779407 | 1 |
| KSS | 37 | 951330 | -3 |
| Average | 28.6 | 737337 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $737 million. That figure was $1372 million in JHG’s case. Tenet Healthcare Corp (NYSE:THC) is the most popular stock in this table. On the other hand RLX Technology Inc. (NYSE:RLX) is the least popular one with only 11 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 49.1. 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 negative signal and 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 surpassed the market again by 5.1 percentage points. Unfortunately JHG wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); JHG investors were disappointed as the stock returned 1.2% 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 most of these stocks already outperformed the market in 2021.
Follow Janus Henderson Group Plc (NYSE:JHG)
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Disclosure: None. This article was originally published at Insider Monkey.
