Insperity Stock Down 55% From Highs as Hedge Fund Buys $13 Million Stake — Is It A Turnaround Bet?

Connecticut-based Stadium Capital Management initiated a new position in Insperity (NSP), adding 263,715 shares valued at approximately $13 million during the third quarter, according to a November 14 SEC filing.

What Happened

According to a Securities and Exchange Commission (SEC) filing dated November 14, Stadium Capital Management disclosed a new position in Insperity (NYSE:NSP). The firm reported ownership of 263,715 shares with a market value of $13 million as of September 30. This addition accounted for 13.9% of the fund’s $93.6 million in reportable U.S. equity assets at quarter-end.

What Else to Know

Top holdings after the filing:

• NYSE:BLDR: $22.2 million (23.7% of AUM)
• NYSE:BC: $19.5 million (20.8% of AUM)
• NASDAQ:SNBR: $18.4 million (19.6% of AUM)
• NYSE:NSP: $13 million (13.9% of AUM)
• NYSE:LCII: $8.9 million (9.6% of AUM)

As of Friday, shares were priced at $35.37, down 55% over one year and well underperforming the S&P 500, which is up 14% in the same period.

Company Overview

Company Snapshot

Insperity provides human resources outsourcing, payroll administration, employee benefits, compliance, and cloud-based HR management solutions. It generates revenue primarily through service fees for HR outsourcing and support, leveraging a scalable platform to serve small and medium-sized businesses. The firm targets small and mid-sized enterprises across the United States seeking comprehensive HR and workforce management solutions. Its competitive advantage lies in its full-service platform, enabling clients to streamline HR operations and focus on core business growth.

Foolish Take

This move seemingly signals a meaningful shift toward value hunting in a sector facing real cyclical and cost pressures. Insperity’s stock has fallen sharply over the past year as rising healthcare costs eroded margins, yet the company’s new multi-year contract with UnitedHealthcare—expected to materially reduce large-claim cost exposure starting in 2026—could reset its earnings trajectory. Stadium Capital’s sizable new position suggests confidence that the business is positioned for operational recovery rather than structural decline.

The firm’s $13 million investment makes Insperity its fourth-largest equity holding, a notable allocation given the fund’s typically concentrated profile. While revenue rose 4% last quarter to $1.6 billion, elevated healthcare costs pushed the quarter to a $20 million net loss, and adjusted EBITDA fell to $10 million—down sharply from last year. Nevertheless, management highlighted meaningful progress on cost controls and the upcoming benefits of the UnitedHealthcare agreement, which lowers the pooling level for large claims to $500,000 beginning in 2026.

Ultimately, Insperity shares, down 55% over the past year, are priced as if conditions won’t improve. But for investors who believe in the company’s long-term recurring-revenue model and its scalable HR services platform, this pullback could be an opportunity.

Glossary

Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
13F Reportable AUM: The portion of a fund’s assets that must be disclosed in quarterly SEC Form 13F filings, covering U.S. equity holdings.
Position: The amount of a particular security or asset held in a portfolio by an investor or fund.
Dividend Yield: Annual dividends paid by a company divided by its current share price, shown as a percentage.
Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.
Stake: The ownership interest or number of shares a fund or investor holds in a company.
Human Resources Outsourcing: Contracting external providers to handle HR functions like payroll, benefits, and compliance for a business.
Scalable Platform: A system or service that can efficiently handle increased workload or growth without losing performance.
Service Fees: Charges paid by clients to a company for providing specific services, often recurring.
Integrated HR Technology: Software solutions that combine various human resources functions into a single, unified platform.
Full-Service Platform: A comprehensive solution offering a wide range of related services or features within one system.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Brunswick, LCI Industries, and Sleep Number. The Motley Fool has a disclosure policy.