Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Accenture Plc (NYSE:ACN).
Accenture Plc (NYSE:ACN) investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. Accenture Plc (NYSE:ACN) was in 52 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 50. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 48 hedge funds in our database with ACN positions at the end of the first quarter. Our calculations also showed that ACN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
If you’d ask most stock holders, hedge funds are perceived as worthless, old investment tools of years past. While there are greater than 8000 funds with their doors open today, We look at the crème de la crème of this group, around 850 funds. These hedge fund managers handle bulk of all hedge funds’ total asset base, and by observing their highest performing investments, Insider Monkey has formulated numerous investment strategies that have historically outstripped Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Phillip Gross of Adage Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a glance at the key hedge fund action encompassing Accenture Plc (NYSE:ACN).
Do Hedge Funds Think ACN Is A Good Stock To Buy Now?
At second quarter’s end, a total of 52 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ACN over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Accenture Plc (NYSE:ACN) was held by GQG Partners, which reported holding $547.8 million worth of stock at the end of June. It was followed by D E Shaw with a $365.3 million position. Other investors bullish on the company included AQR Capital Management, GuardCap Asset Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position GuardCap Asset Management allocated the biggest weight to Accenture Plc (NYSE:ACN), around 4.74% of its 13F portfolio. Intermede Investment Partners is also relatively very bullish on the stock, earmarking 3.56 percent of its 13F equity portfolio to ACN.
As one would reasonably expect, some big names were leading the bulls’ herd. Renaissance Technologies, created the most valuable position in Accenture Plc (NYSE:ACN). Renaissance Technologies had $127 million invested in the company at the end of the quarter. James Parsons’s Junto Capital Management also made a $79.6 million investment in the stock during the quarter. The following funds were also among the new ACN investors: Dmitry Balyasny’s Balyasny Asset Management, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and George Soros’s Soros Fund Management.
Let’s check out hedge fund activity in other stocks similar to Accenture Plc (NYSE:ACN). We will take a look at BHP Group (NYSE:BHP), Shopify Inc (NYSE:SHOP), United Parcel Service, Inc. (NYSE:UPS), T-Mobile US, Inc. (NYSE:TMUS), Texas Instruments Incorporated (NASDAQ:TXN), Costco Wholesale Corporation (NASDAQ:COST), and McDonald’s Corporation (NYSE:MCD). This group of stocks’ market values resemble ACN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BHP | 18 | 752906 | 0 |
| SHOP | 85 | 13978469 | -6 |
| UPS | 52 | 2188804 | 8 |
| TMUS | 100 | 8020682 | 2 |
| TXN | 50 | 2468540 | 8 |
| COST | 54 | 4321174 | -2 |
| MCD | 66 | 2714779 | -1 |
| Average | 60.7 | 4920765 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 60.7 hedge funds with bullish positions and the average amount invested in these stocks was $4921 million. That figure was $3152 million in ACN’s case. T-Mobile US, Inc. (NYSE:TMUS) is the most popular stock in this table. On the other hand BHP Group (NYSE:BHP) is the least popular one with only 18 bullish hedge fund positions. Accenture Plc (NYSE:ACN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACN is 59.7. 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. 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 29.6% in 2021 through November 5th and still beat the market by 3.1 percentage points. A small number of hedge funds were also right about betting on ACN as the stock returned 25.7% since the end of the second quarter (through 11/5) and outperformed the market by an even larger margin.
Follow Accenture Plc (NYSE:ACN)
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Disclosure: None. This article was originally published at Insider Monkey.
