Is CBRE Group Inc (NYSE:CBG) a bargain? The best stock pickers are getting less optimistic. The number of long hedge fund bets went down by 4 lately.
If you’d ask most stock holders, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, we choose to focus on the crème de la crème of this club, close to 450 funds. It is estimated that this group controls the lion’s share of the hedge fund industry’s total capital, and by paying attention to their highest performing picks, we have unearthed a few investment strategies that have historically outperformed 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as important, optimistic insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are a variety of incentives for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this method if you know what to do (learn more here).
Now, let’s take a peek at the recent action regarding CBRE Group Inc (NYSE:CBG).
What does the smart money think about CBRE Group Inc (NYSE:CBG)?
At the end of the fourth quarter, a total of 20 of the hedge funds we track held long positions in this stock, a change of -17% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Jeffrey Ubben’s ValueAct Capital had the biggest position in CBRE Group Inc (NYSE:CBG), worth close to $637 million, accounting for 8.1% of its total 13F portfolio. The second largest stake is held by Select Equity Group, managed by Robert Joseph Caruso, which held a $369 million position; 3.1% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Richard Blum’s Blum Capital Partners, Christopher Medlock James’s Partner Fund Management and John W. Rogers’s Ariel Investments.
Due to the fact that CBRE Group Inc (NYSE:CBG) has experienced a declination in interest from the smart money, logic holds that there were a few money managers who sold off their positions entirely last quarter. At the top of the heap, Jeffrey Vinik’s Vinik Asset Management dropped the largest position of the 450+ funds we watch, comprising about $23 million in stock.. Donald Chiboucis’s fund, Columbus Circle Investors, also dropped its stock, about $20 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 4 funds last quarter.
What have insiders been doing with CBRE Group Inc (NYSE:CBG)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, CBRE Group Inc (NYSE:CBG) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned research, everyday investors must always keep an eye on hedge fund and insider trading activity, and CBRE Group Inc (NYSE:CBG) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.