In this article we will check out the progression of hedge fund sentiment towards Huron Consulting Group Inc. (NASDAQ:HURN) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Huron Consulting Group Inc. (NASDAQ:HURN) shareholders have witnessed an increase in hedge fund sentiment lately. Our calculations also showed that HURN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to review the latest hedge fund action regarding Huron Consulting Group Inc. (NASDAQ:HURN).
Hedge fund activity in Huron Consulting Group Inc. (NASDAQ:HURN)
Heading into the second quarter of 2020, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in HURN over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Huron Consulting Group Inc. (NASDAQ:HURN), with a stake worth $18.9 million reported as of the end of September. Trailing Renaissance Technologies was Marshall Wace LLP, which amassed a stake valued at $5.9 million. Columbus Circle Investors, SG Capital Management, and Intrinsic Edge Capital 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 SG Capital Management allocated the biggest weight to Huron Consulting Group Inc. (NASDAQ:HURN), around 1.89% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, setting aside 0.52 percent of its 13F equity portfolio to HURN.
As aggregate interest increased, key money managers have jumped into Huron Consulting Group Inc. (NASDAQ:HURN) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most outsized position in Huron Consulting Group Inc. (NASDAQ:HURN). Marshall Wace LLP had $5.9 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also made a $1.7 million investment in the stock during the quarter. The other funds with brand new HURN positions are Thomas Bailard’s Bailard Inc and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Huron Consulting Group Inc. (NASDAQ:HURN) but similarly valued. We will take a look at Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), Fangdd Network Group Ltd. (NASDAQ:DUO), Middlesex Water Company (NASDAQ:MSEX), and Avis Budget Group Inc. (NASDAQ:CAR). This group of stocks’ market values are similar to HURN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YMAB | 11 | 98663 | -1 |
| DUO | 1 | 413 | 0 |
| MSEX | 7 | 49591 | -2 |
| CAR | 23 | 475620 | -4 |
| Average | 10.5 | 156072 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $57 million in HURN’s case. Avis Budget Group Inc. (NASDAQ:CAR) is the most popular stock in this table. On the other hand Fangdd Network Group Ltd. (NASDAQ:DUO) is the least popular one with only 1 bullish hedge fund positions. Huron Consulting Group Inc. (NASDAQ:HURN) is not the most popular stock in this group but hedge fund interest is still above average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but beat the market by 15.9 percentage points. Unfortunately HURN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on HURN were disappointed as the stock returned -4.5% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
