How do we determine whether FTI Consulting, Inc. (NYSE:FCN) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
FTI Consulting, Inc. (NYSE:FCN) investors should be aware of a decrease in activity from the world’s largest hedge funds of late. At the end of this article we will also compare FCN to other stocks including Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR), Herman Miller, Inc. (NASDAQ:MLHR), and Zendesk Inc (NYSE:ZEN) to get a better sense of its popularity.
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With all of this in mind, we’re going to analyze the new action encompassing FTI Consulting, Inc. (NYSE:FCN).
Hedge fund activity in FTI Consulting, Inc. (NYSE:FCN)
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Third Avenue Management, managed by Martin Whitman, holds the most valuable position in FTI Consulting, Inc. (NYSE:FCN). Third Avenue Management has an $8.8 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, led by Jim Simons, holding an $5.6 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism contain Israel Englander’s Millennium Management, Peter Muller’s PDT Partners and Cliff Asness’s AQR Capital Management.
Since FTI Consulting, Inc. (NYSE:FCN) has witnessed a declination in interest from hedge fund managers, it’s safe to say that there was a specific group of money managers that decided to sell off their full holdings in the third quarter. Interestingly, Joel Greenblatt’s Gotham Asset Management sold off the biggest position of all the hedgies monitored by Insider Monkey, valued at close to $17.3 million in stock, and George Hall’s Clinton Group was right behind this move, as the fund dumped about $0.2 million worth. These transactions 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 FTI Consulting, Inc. (NYSE:FCN) but similarly valued. These stocks are Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR), Herman Miller, Inc. (NASDAQ:MLHR), Zendesk Inc (NYSE:ZEN), and DineEquity Inc (NYSE:DIN). This group of stocks’ market values are similar to FCN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EBR | 6 | 10869 | 2 |
| MLHR | 26 | 126616 | 3 |
| ZEN | 21 | 282574 | -2 |
| DIN | 17 | 217081 | -6 |
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $24 million in FCN’s case. Herman Miller, Inc. (NASDAQ:MLHR) is the most popular stock in this table. On the other hand Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR) is the least popular one with only 6 bullish hedge fund positions. FTI Consulting, Inc. (NYSE:FCN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MLHR might be a better candidate to consider a long position.
