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Did Hedge Funds Drop The Ball On Cushman & Wakefield plc (CWK) ?

Does Cushman & Wakefield plc (NYSE:CWK) 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 satellite photos and other 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 net net their stock picks have been generating superior risk-adjusted returns on average over the years.

Is Cushman & Wakefield plc (NYSE:CWK) undervalued? Investors who are in the know are taking a bearish view. The number of long hedge fund positions retreated by 2 in recent months. Our calculations also showed that cwk isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to 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 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

CAPITAL GROWTH MANAGEMENT

Let’s check out the latest hedge fund action encompassing Cushman & Wakefield plc (NYSE:CWK).

Hedge fund activity in Cushman & Wakefield plc (NYSE:CWK)

At Q4’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CWK over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds With CWK Positions

More specifically, Lakewood Capital Management was the largest shareholder of Cushman & Wakefield plc (NYSE:CWK), with a stake worth $43 million reported as of the end of September. Trailing Lakewood Capital Management was Citadel Investment Group, which amassed a stake valued at $26.5 million. Land & Buildings Investment Management, Capital Growth Management, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.

Because Cushman & Wakefield plc (NYSE:CWK) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few hedgies that slashed their positions entirely by the end of the third quarter. Intriguingly, Ravi Chopra’s Azora Capital sold off the biggest position of the 700 funds tracked by Insider Monkey, valued at close to $13.1 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund dropped about $4.3 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 2 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Cushman & Wakefield plc (NYSE:CWK). We will take a look at Manchester United PLC (NYSE:MANU), Azul S.A. (NYSE:AZUL), NovoCure Limited (NASDAQ:NVCR), and Cantel Medical Corp. (NYSE:CMD). This group of stocks’ market caps match CWK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MANU 9 61678 1
AZUL 11 145148 0
NVCR 17 218712 -3
CMD 13 182274 -10
Average 12.5 151953 -3

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $142 million in CWK’s case. NovoCure Limited (NASDAQ:NVCR) is the most popular stock in this table. On the other hand Manchester United PLC (NYSE:MANU) is the least popular one with only 9 bullish hedge fund positions. Cushman & Wakefield plc (NYSE:CWK) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on CWK as the stock returned 27.7% and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.

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