Were Hedge Funds Right About SS&C Technologies Holdings, Inc. (SSNC)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) and determine whether the smart money was really smart about this stock.

Is SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) a buy, sell, or hold? Prominent investors were betting on the stock. The number of bullish hedge fund bets moved up by 2 recently. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) was in 51 hedge funds’ portfolios at the end of September. The all time high for this statistic is 65. Our calculations also showed that SSNC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 49 hedge funds in our database with SSNC holdings at the end of June.

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. With all of this in mind let’s review the key hedge fund action encompassing SS&C Technologies Holdings, Inc. (NASDAQ:SSNC).

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

At third quarter’s end, a total of 51 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SSNC over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the biggest position in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), worth close to $809.5 million, comprising 2.7% of its total 13F portfolio. The second largest stake is held by Alkeon Capital Management, managed by Panayotis Takis Sparaggis, which holds a $373.8 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism encompass William von Mueffling’s Cantillon Capital Management, Seth Klarman’s Baupost Group and John Smith Clark’s Southpoint Capital Advisors. In terms of the portfolio weights assigned to each position Blacksheep Fund Management allocated the biggest weight to SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), around 12.79% of its 13F portfolio. Sunriver Management is also relatively very bullish on the stock, designating 9.73 percent of its 13F equity portfolio to SSNC.

Consequently, key money managers were leading the bulls’ herd. Junto Capital Management, managed by James Parsons, established the largest position in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). Junto Capital Management had $108.3 million invested in the company at the end of the quarter. Mikal Patel’s Oribel Capital Management also initiated a $24.8 million position during the quarter. The following funds were also among the new SSNC investors: Ben Gordon’s Blue Grotto Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) but similarly valued. We will take a look at Teleflex Incorporated (NYSE:TFX), Domino’s Pizza, Inc. (NYSE:DPZ), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Pembina Pipeline Corp (NYSE:PBA), Western Digital Corporation (NASDAQ:WDC), Pool Corporation (NASDAQ:POOL), and Shinhan Financial Group Co., Ltd. (NYSE:SHG). This group of stocks’ market valuations match SSNC’s market valuation.

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As you can see these stocks had an average of 25.6 hedge funds with bullish positions and the average amount invested in these stocks was $824 million. That figure was $2925 million in SSNC’s case. Western Digital Corporation (NASDAQ:WDC) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is more popular among hedge funds. Our overall hedge fund sentiment score for SSNC is 80.5. 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 returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on SSNC as the stock returned 15.4% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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

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