Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Sykes Enterprises, Incorporated (NASDAQ:SYKE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Sykes Enterprises, Incorporated (NASDAQ:SYKE) a healthy stock for your portfolio? The best stock pickers are becoming less hopeful. The number of bullish hedge fund bets shrunk by 2 in recent months. Our calculations also showed that SYKE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to 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 hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
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. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a look at the fresh hedge fund action regarding Sykes Enterprises, Incorporated (NASDAQ:SYKE).
What does smart money think about Sykes Enterprises, Incorporated (NASDAQ:SYKE)?
Heading into the fourth quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SYKE over the last 17 quarters. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Richard S. Pzena’s Pzena Investment Management has the number one position in Sykes Enterprises, Incorporated (NASDAQ:SYKE), worth close to $23.5 million, corresponding to 0.1% of its total 13F portfolio. Coming in second is Renaissance Technologies, with a $17.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’s AQR Capital Management and Mark Travis’s Intrepid Capital Management. In terms of the portfolio weights assigned to each position Intrepid Capital Management allocated the biggest weight to Sykes Enterprises, Incorporated (NASDAQ:SYKE), around 3.56% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 0.68 percent of its 13F equity portfolio to SYKE.
Due to the fact that Sykes Enterprises, Incorporated (NASDAQ:SYKE) has faced a decline in interest from the smart money, we can see that there were a few hedge funds who sold off their full holdings in the third quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace dumped the largest stake of the “upper crust” of funds followed by Insider Monkey, valued at about $5.1 million in stock. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $1.7 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Sykes Enterprises, Incorporated (NASDAQ:SYKE) but similarly valued. We will take a look at Boise Cascade Company (NYSE:BCC), Shutterstock Inc (NYSE:SSTK), Perficient, Inc. (NASDAQ:PRFT), and Pampa Energia S.A. (NYSE:PAM). This group of stocks’ market caps match SYKE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCC | 13 | 52582 | 2 |
| SSTK | 15 | 79364 | -3 |
| PRFT | 15 | 63971 | -1 |
| PAM | 10 | 64708 | -2 |
| Average | 13.25 | 65156 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $72 million in SYKE’s case. Shutterstock Inc (NYSE:SSTK) is the most popular stock in this table. On the other hand Pampa Energia S.A. (NYSE:PAM) is the least popular one with only 10 bullish hedge fund positions. Sykes Enterprises, Incorporated (NASDAQ:SYKE) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on SYKE as the stock returned 14.7% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
