Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Wageworks Inc (NYSE:WAGE).
Hedge fund interest in Wageworks Inc (NYSE:WAGE) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare WAGE to other stocks including Astoria Financial Corp (NYSE:AF), Gentherm Inc (NASDAQ:THRM), and Fairchild Semiconductor Intl Inc (NYSE:FCS) to get a better sense of its popularity.
Follow Wageworks Inc. (NYSE:WAGE)
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In the financial world there are a multitude of tools investors use to size up publicly traded companies. Two of the less known tools are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best fund managers can trounce the market by a solid amount (see the details here).
With all of this in mind, we’re going to take a glance at the fresh action encompassing Wageworks Inc (NYSE:WAGE).
How have hedgies been trading Wageworks Inc (NYSE:WAGE)?
When looking at the institutional investors followed by Insider Monkey, Matthew A. Weatherbie’s Weatherbie Capital has the number one position in Wageworks Inc (NYSE:WAGE), worth close to $23.8 million, corresponding to 2.8% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which holds an $9.4 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism encompass Israel Englander’s Millennium Management, Richard S. Meisenberg’s ACK Asset Management and D E Shaw.
It’s worth mentioning that Glenn Russell Dubin’s Highbridge Capital Management said goodbye to the biggest investment of the 700 funds watched by Insider Monkey, worth about $1.5 million in stock. Chao Ku’s fund, Nine Chapters Capital Management, also said goodbye to its stock, about $0.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Wageworks Inc (NYSE:WAGE). We will take a look at Astoria Financial Corp (NYSE:AF), Gentherm Inc (NASDAQ:THRM), Fairchild Semiconductor Intl Inc (NYSE:FCS), and SeaWorld Entertainment Inc (NYSE:SEAS). This group of stocks’ market values are closest to WAGE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AF | 16 | 270976 | 2 |
| THRM | 16 | 50454 | -2 |
| FCS | 14 | 107811 | -6 |
| SEAS | 30 | 302777 | -3 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $65 million in WAGE’s case. SeaWorld Entertainment Inc (NYSE:SEAS) is the most popular stock in this table. On the other hand Fairchild Semiconductor Intl Inc (NYSE:FCS) is the least popular one with only 14 bullish hedge fund positions. Wageworks Inc (NYSE:WAGE) 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 SEAS might be a better candidate to consider a long position.
