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

In this article we will check out the progression of hedge fund sentiment towards Robert Half International Inc. (NYSE:RHI) 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.

Is Robert Half International Inc. (NYSE:RHI) an exceptional investment now? The smart money was becoming more confident. The number of long hedge fund bets went up by 4 in recent months. Robert Half International Inc. (NYSE:RHI) was in 27 hedge funds’ portfolios at the end of the third quarter of 2021. 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 Q3 rankings).

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 view the recent hedge fund action encompassing Robert Half International Inc. (NYSE:RHI).

Noam Gottesman of GLG Partners

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

At the end of September, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter of 2021. On the other hand, there were a total of 29 hedge funds with a bullish position in RHI a year ago. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Robert Half International Inc. (NYSE:RHI). AQR Capital Management has a $162.5 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Balyasny Asset Management, led by Dmitry Balyasny, holding a $24.4 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism encompass Renaissance Technologies, Noam Gottesman’s GLG Partners and John D. Gillespie’s Prospector Partners. In terms of the portfolio weights assigned to each position Prospector Partners allocated the biggest weight to Robert Half International Inc. (NYSE:RHI), around 1.69% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, dishing out 0.37 percent of its 13F equity portfolio to RHI.

Consequently, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the most valuable position in Robert Half International Inc. (NYSE:RHI). Arrowstreet Capital had $11.6 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $11.4 million investment in the stock during the quarter. The other funds with brand new RHI positions are Greg Poole’s Echo Street Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s now take a look at hedge fund activity in other stocks similar to Robert Half International Inc. (NYSE:RHI). These stocks are UWM Holdings Corporation (NYSE:UWMC), Morningstar, Inc. (NASDAQ:MORN), Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR), Invesco Ltd. (NYSE:IVZ), Kirkland Lake Gold Ltd. (NYSE:KL), Wix.Com Ltd (NASDAQ:WIX), and ironSource Ltd. (NYSE:IS). All of these stocks’ market caps are similar to RHI’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $712 million. That figure was $318 million in RHI’s case. Invesco Ltd. (NYSE:IVZ) is the most popular stock in this table. On the other hand Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR) is the least popular one with only 6 bullish hedge fund positions. Robert Half International Inc. (NYSE:RHI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RHI is 69.7. 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 positive signal but 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 beat the market again by 5.1 percentage points. Unfortunately RHI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on RHI were disappointed as the stock returned 8% 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.