Do Hedge Funds Love CBRE Group, Inc. (CBRE)?

Is CBRE Group, Inc. (NYSE:CBRE) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

CBRE Group, Inc. (NYSE:CBRE) was in 30 hedge funds’ portfolios at the end of March. The all time high for this statistic is 34. CBRE investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. There were 31 hedge funds in our database with CBRE positions at the end of the fourth quarter. Our calculations also showed that CBRE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

According to most stock holders, hedge funds are perceived as underperforming, old investment vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, Our experts look at the masters of this club, around 850 funds. Most estimates calculate that this group of people command the majority of the hedge fund industry’s total capital, and by watching their inimitable picks, Insider Monkey has brought to light a number of investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Sahm Adrangi Kerrisdale Capital

Sahm Adrangi of Kerrisdale Capital

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Do Hedge Funds Think CBRE Is A Good Stock To Buy Now?

At first quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. By comparison, 33 hedge funds held shares or bullish call options in CBRE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in CBRE Group, Inc. (NYSE:CBRE) was held by ValueAct Capital, which reported holding $809.3 million worth of stock at the end of December. It was followed by Generation Investment Management with a $779 million position. Other investors bullish on the company included Cantillon Capital Management, Arrowstreet Capital, and Hosking Partners. In terms of the portfolio weights assigned to each position ValueAct Capital allocated the biggest weight to CBRE Group, Inc. (NYSE:CBRE), around 9.45% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, setting aside 3.27 percent of its 13F equity portfolio to CBRE.

Judging by the fact that CBRE Group, Inc. (NYSE:CBRE) has experienced bearish sentiment from hedge fund managers, we can see that there exists a select few fund managers who were dropping their positions entirely heading into Q2. Interestingly, Donald Sussman’s Paloma Partners cut the biggest position of the “upper crust” of funds monitored by Insider Monkey, valued at about $3.8 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund cut about $3.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q2.

Let’s now review hedge fund activity in other stocks similar to CBRE Group, Inc. (NYSE:CBRE). These stocks are Royalty Pharma Plc (NASDAQ:RPRX), Ecopetrol S.A. (NYSE:EC), Magna International Inc. (NYSE:MGA), BioNTech SE (NASDAQ:BNTX), XPeng Inc. (NYSE:XPEV), Zebra Technologies Corporation (NASDAQ:ZBRA), and Ryanair Holdings plc (NASDAQ:RYAAY). This group of stocks’ market caps resemble CBRE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RPRX 26 1835240 8
EC 8 98728 1
MGA 34 671764 -4
BNTX 18 172627 1
XPEV 19 976276 -11
ZBRA 35 1163526 -6
RYAAY 14 568235 -9
Average 22 783771 -2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $784 million. That figure was $2601 million in CBRE’s case. Zebra Technologies Corporation (NASDAQ:ZBRA) is the most popular stock in this table. On the other hand Ecopetrol S.A. (NYSE:EC) is the least popular one with only 8 bullish hedge fund positions. CBRE Group, Inc. (NYSE:CBRE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CBRE is 71.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately CBRE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CBRE were disappointed as the stock returned 8.6% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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