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Did Hedge Funds Make The Right Call On Cohen & Steers, Inc. (CNS) ?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Cohen & Steers, Inc. (NYSE:CNS) and determine whether the smart money was really smart about this stock.

Cohen & Steers, Inc. (NYSE:CNS) was in 20 hedge funds’ portfolios at the end of March. CNS investors should be aware of an increase in hedge fund interest in recent months. There were 16 hedge funds in our database with CNS positions at the end of the previous quarter. Our calculations also showed that CNS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most stock holders, hedge funds are viewed as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds trading today, Our researchers look at the aristocrats of this club, about 850 funds. It is estimated that this group of investors control most of the hedge fund industry’s total asset base, and by shadowing their unrivaled picks, Insider Monkey has brought to light many investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Mario Gabelli of GAMCO Investors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. With all of this in mind let’s analyze the latest hedge fund action surrounding Cohen & Steers, Inc. (NYSE:CNS).

What does smart money think about Cohen & Steers, Inc. (NYSE:CNS)?

Heading into the second quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CNS over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, GAMCO Investors held the most valuable stake in Cohen & Steers, Inc. (NYSE:CNS), which was worth $26.3 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $8.6 million worth of shares. Azora Capital, Driehaus Capital, and Point72 Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Azora Capital allocated the biggest weight to Cohen & Steers, Inc. (NYSE:CNS), around 1.94% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 1.28 percent of its 13F equity portfolio to CNS.

Consequently, specific money managers have been driving this bullishness. Azora Capital, managed by Ravi Chopra, created the largest position in Cohen & Steers, Inc. (NYSE:CNS). Azora Capital had $5 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $4.6 million position during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Greg Eisner’s Engineers Gate Manager, and Mika Toikka’s AlphaCrest Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Cohen & Steers, Inc. (NYSE:CNS). We will take a look at Rapid7 Inc (NASDAQ:RPD), FGL Holdings (NYSE:FG), Tenable Holdings, Inc. (NASDAQ:TENB), and iRhythm Technologies, Inc. (NASDAQ:IRTC). This group of stocks’ market values match CNS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RPD 16 146199 -7
FG 26 210333 9
TENB 24 236868 2
IRTC 15 176679 -7
Average 20.25 192520 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $193 million. That figure was $67 million in CNS’s case. FGL Holdings (NYSE:FG) is the most popular stock in this table. On the other hand iRhythm Technologies, Inc. (NASDAQ:IRTC) is the least popular one with only 15 bullish hedge fund positions. Cohen & Steers, Inc. (NYSE:CNS) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 18.6% in 2020 through July 27th and still beat the market by 17.1 percentage points. A small number of hedge funds were also right about betting on CNS as the stock returned 43.1% since the end of March and outperformed the market by an even larger margin.

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