Do Hedge Funds and Insiders Love CME Group Inc (NASDAQ:CME)?

CME Group Inc (NASDAQ:CME) was in 31 hedge funds’ portfolio at the end of the fourth quarter of 2012. CME investors should be aware of a decrease in enthusiasm from smart money in recent months. There were 33 hedge funds in our database with CME holdings at the end of the previous quarter.

CME Group Inc

In the 21st century investor’s toolkit, there are a multitude of metrics market participants can use to monitor publicly traded companies. Two of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can outpace the market by a healthy amount (see just how much).

Just as integral, optimistic insider trading sentiment is another way to break down the investments you’re interested in. Obviously, there are a variety of stimuli for an insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if shareholders understand where to look (learn more here).

Now, it’s important to take a glance at the recent action regarding CME Group Inc (NASDAQ:CME).

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

In preparation for this year, a total of 31 of the hedge funds we track were bullish in this stock, a change of -6% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies we track, Patrick Degorce’s Theleme Partners had the largest position in CME Group Inc (NASDAQ:CME), worth close to $121 million billion, accounting for 9.3% of its total 13F portfolio. Sitting at the No. 2 spot is Ricky Sandler of Eminence Capital, with a $98 million position; 0.1% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, and D. E. Shaw’s D E Shaw.

Because CME Group Inc (NASDAQ:CME) has experienced declining sentiment from hedge fund managers, logic holds that there were a few funds that slashed their entire stakes last quarter. Intriguingly, Robert Joseph Caruso’s Select Equity Group cut the biggest stake of all the hedgies we monitor, worth about $43 million in stock.. Bart Baum’s fund, Ionic Capital Management, also dumped its stock, about $3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 2 funds last quarter.

What have insiders been doing with CME Group Inc (NASDAQ:CME)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time frame, CME Group Inc (NASDAQ:CME) has seen zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

With the results demonstrated by our research, retail investors must always watch hedge fund and insider trading activity, and CME Group Inc (NASDAQ:CME) is an important part of this process.

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