Should I Avoid Robert Half International Inc. (RHI)?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Robert Half International Inc. (NYSE:RHI) to find out whether there were any major changes in hedge funds’ views.

Robert Half International Inc. (NYSE:RHI) shareholders have witnessed a decrease in hedge fund sentiment recently. Robert Half International Inc. (NYSE:RHI) was in 23 hedge funds’ portfolios at the end of June. The all time high for this statistic is 29. Our calculations also showed that RHI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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Ken Griffin of Citadel Investment Group

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

Heading into the third quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from one quarter earlier. By comparison, 28 hedge funds held shares or bullish call options in RHI a year ago. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’s AQR Capital Management has the biggest position in Robert Half International Inc. (NYSE:RHI), worth close to $143.9 million, comprising 0.2% of its total 13F portfolio. Coming in second is Renaissance Technologies, holding a $23.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions contain Dmitry Balyasny’s Balyasny Asset Management, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Prospector Partners allocated the biggest weight to Robert Half International Inc. (NYSE:RHI), around 1.55% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, designating 0.4 percent of its 13F equity portfolio to RHI.

Since Robert Half International Inc. (NYSE:RHI) has faced falling interest from the entirety of the hedge funds we track, logic holds that there were a few fund managers who sold off their positions entirely last quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP cut the largest investment of the 750 funds followed by Insider Monkey, totaling about $7.3 million in stock, and Jinghua Yan’s TwinBeech Capital was right behind this move, as the fund said goodbye to about $1.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Robert Half International Inc. (NYSE:RHI). We will take a look at Jones Lang LaSalle Inc (NYSE:JLL), Proofpoint Inc (NASDAQ:PFPT), Penumbra Inc (NYSE:PEN), Carlisle Companies, Inc. (NYSE:CSL), Natera Inc (NASDAQ:NTRA), Banco de Chile (NYSE:BCH), and Dolby Laboratories, Inc. (NYSE:DLB). All of these stocks’ market caps are similar to RHI’s market cap.

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As you can see these stocks had an average of 30.9 hedge funds with bullish positions and the average amount invested in these stocks was $1079 million. That figure was $282 million in RHI’s case. Natera Inc (NASDAQ:NTRA) is the most popular stock in this table. On the other hand Banco de Chile (NYSE:BCH) is the least popular one with only 7 bullish hedge fund positions. Robert Half International Inc. (NYSE:RHI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RHI is 42.6. 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 RHI as the stock returned 27.1% 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.