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Hedge Funds Are Dumping CME Group Inc (CME)

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CME Group Inc (NASDAQ:CME) was in 30 hedge funds’ portfolio at the end of March. CME has seen a decrease in support from the world’s most elite money managers of late. There were 35 hedge funds in our database with CME holdings at the end of the previous quarter.

CME Group Inc

If you’d ask most market participants, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at the moment, we look at the moguls of this club, about 450 funds. It is widely believed that this group controls most of all hedge funds’ total asset base, and by keeping an eye on their best investments, we have determined a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as key, positive insider trading sentiment is another way to break down the investments you’re interested in. There are a variety of motivations for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this strategy if piggybackers know what to do (learn more here).

With all of this in mind, let’s take a peek at the recent action encompassing CME Group Inc (NASDAQ:CME).

How have hedgies been trading CME Group Inc (NASDAQ:CME)?

At Q1’s end, a total of 30 of the hedge funds we track were bullish in this stock, a change of -14% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Lone Pine Capital, managed by Stephen Mandel, holds the most valuable position in CME Group Inc (NASDAQ:CME). Lone Pine Capital has a $217.5 million position in the stock, comprising 1.1% of its 13F portfolio. On Lone Pine Capital’s heels is Patrick Degorce of Theleme Partners, with a $144.3 million position; 11.5% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Stephen Mandel’s Lone Pine Capital, Ricky Sandler’s Eminence Capital and David Stemerman’s Conatus Capital Management.

Due to the fact that CME Group Inc (NASDAQ:CME) has witnessed bearish sentiment from hedge fund managers, logic holds that there were a few money managers that elected to cut their full holdings heading into Q2. It’s worth mentioning that Kenney Y. Oh’s SeaStone Capital Management dumped the largest investment of all the hedgies we watch, comprising an estimated $21.9 million in stock., and Murray Stahl of Horizon Asset Management was right behind this move, as the fund sold off about $17.6 million worth. These transactions are interesting, as total hedge fund interest fell by 5 funds heading into Q2.

How are insiders trading CME Group Inc (NASDAQ:CME)?

Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, CME Group Inc (NASDAQ:CME) has seen zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to CME Group Inc (NASDAQ:CME). These stocks are LPL Financial Holdings Inc (NASDAQ:LPLA), Morgan Stanley (NYSE:MS), TD Ameritrade Holding Corp. (NYSE:AMTD), Nomura Holdings, Inc. (ADR) (NYSE:NMR), and Charles Schwab Corp (NYSE:SCHW). This group of stocks belong to the investment brokerage – national industry and their market caps match CME’s market cap.

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