Here’s the Smart Money’s Take On Heidrick & Struggles International, Inc. (HSII)

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Is Heidrick & Struggles International, Inc. (NASDAQ:HSII) a buy, sell, or hold? Money managers are indeed actually turning less bullish. The number of long hedge fund positions that are disclosed in regulatory 13F filings contracted by 2 in recent months. HSII was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. There were 15 hedge funds in our database with HSII positions at the end of the previous quarter. At the end of this article we will also compare HSII to other stocks including Rockwell Medical Inc (NASDAQ:RMTI), Calumet Specialty Products Partners, L.P (NASDAQ:CLMT), and Akebia Therapeutics Inc (NASDAQ:AKBA) 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 have hedge funds been doing with Heidrick & Struggles International, Inc. (NASDAQ:HSII)?

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 13% drop from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HSII over the last 5 quarters, which has trended down slightly. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (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 most valuable position in Heidrick & Struggles International, Inc. (NASDAQ:HSII), worth close to $20.2 million. Coming in second is Stadium Capital Management, led by Alexander Medina Seaver, which holds an $11 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions consist of Gregory Summe’s Glen Capital Partners, Chuck Royce’s Royce & Associates, and Cliff Asness’ AQR Capital Management. 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.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest investment of the 700 funds followed by Insider Monkey, totaling close to $0.3 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also said goodbye to its stock, about $0.2 million worth.

Let’s go over hedge fund activity in other stocks similar to Heidrick & Struggles International, Inc. (NASDAQ:HSII). We will take a look at Rockwell Medical Inc (NASDAQ:RMTI), Calumet Specialty Products Partners, L.P (NASDAQ:CLMT), Akebia Therapeutics Inc (NASDAQ:AKBA), and RadNet Inc. (NASDAQ:RDNT). This group of stocks’ market values match HSII’s market value.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $59 million in HSII’s case. Akebia Therapeutics Inc (NASDAQ:AKBA) is the most popular stock in this table. On the other hand Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Heidrick & Struggles International, Inc. (NASDAQ:HSII) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None