Is SS&C Technologies Holdings, Inc. (SSNC) Going to Burn These Hedge Funds?
Published on December 9, 2018 at 11:52 am by Abigail Fisher in Hedge Funds, News
Does SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) represent a good buying opportunity at the moment? Let's briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
Is SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) a bargain? Investors who are in the know are getting more bullish. The number of bullish hedge fund bets moved up by 6 in recent months. Our calculations also showed that SSNC isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to the 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 market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a look at the recent hedge fund action regarding SS&C Technologies Holdings, Inc. (NASDAQ:SSNC).
What have hedge funds been doing with SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)?
Heading into the fourth quarter of 2018, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter of 2018. By comparison, 27 hedge funds held shares or bullish call options in SSNC heading into this year. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Select Equity Group was the largest shareholder of SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), with a stake worth $266.8 million reported as of the end of September. Trailing Select Equity Group was Alkeon Capital Management, which amassed a stake valued at $243.8 million. Cantillon Capital Management, Cantillon Capital Management, and Palestra Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, key money managers were leading the bulls' herd. Strycker View Capital, managed by Usman Waheed, initiated the most valuable position in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). Strycker View Capital had $20.8 million invested in the company at the end of the quarter. Jesse Ro's Tiger Legatus Capital also made a $6.8 million investment in the stock during the quarter. The other funds with brand new SSNC positions are Dmitry Balyasny's Balyasny Asset Management, Ian Simm's Impax Asset Management, and Michael Platt and William Reeves's BlueCrest Capital Mgmt..
Let's now review hedge fund activity in other stocks – not necessarily in the same industry as SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) but similarly valued. These stocks are The Cooper Companies, Inc. (NYSE:COO), E*TRADE Financial Corporation (NASDAQ:ETFC), Arthur J. Gallagher & Co. (NYSE:AJG), and TransUnion (NYSE:TRU). This group of stocks' market values matches SSNC's market value.
No of HFs with positions
Total Value of HF Positions (x1000)
Change in HF Position
COO 18 1125764 0
ETFC 36 1474790 4
AJG 26 380676 4
TRU 29 1758803 0
Average 27.25 1185 2
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $1185 million. That figure was $1698 million in SSNC's case. E*TRADE Financial Corporation (NASDAQ:ETFC) is the most popular stock in this table. On the other hand, The Cooper Companies, Inc. (NYSE:COO) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
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Published on December 9, 2018 at 11:52 am by Inan Dogan, PhD