Do Hedge Funds Love Interactive Brokers Group, Inc. (IBKR)?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Interactive Brokers Group, Inc. (NASDAQ:IBKR).

Interactive Brokers Group, Inc. (NASDAQ:IBKR) was in 36 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 37. IBKR has seen an increase in hedge fund interest recently. There were 31 hedge funds in our database with IBKR holdings at the end of March. Our calculations also showed that IBKR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At the moment there are a lot of gauges stock market investors can use to grade publicly traded companies. A duo of the most under-the-radar gauges are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can outclass the S&P 500 by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

William Von Mueffling - Cantillon Capital Management

William Von Mueffling of Cantillon Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to go over the recent hedge fund action regarding Interactive Brokers Group, Inc. (NASDAQ:IBKR).

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

At the end of the second quarter, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IBKR over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Brian Bares’s Bares Capital Management has the biggest position in Interactive Brokers Group, Inc. (NASDAQ:IBKR), worth close to $335.1 million, accounting for 6% of its total 13F portfolio. Sitting at the No. 2 spot is Select Equity Group, led by Robert Joseph Caruso, holding a $283.4 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions consist of William von Mueffling’s Cantillon Capital Management, Quincy Lee’s Ancient Art (Teton Capital) and Paul Marshall and Ian Wace’s Marshall Wace LLP. In terms of the portfolio weights assigned to each position Ancient Art (Teton Capital) allocated the biggest weight to Interactive Brokers Group, Inc. (NASDAQ:IBKR), around 10.66% of its 13F portfolio. Owls Nest Partners is also relatively very bullish on the stock, dishing out 8.26 percent of its 13F equity portfolio to IBKR.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most valuable position in Interactive Brokers Group, Inc. (NASDAQ:IBKR). Balyasny Asset Management had $21.8 million invested in the company at the end of the quarter. Peter Seuss’s Prana Capital Management also made a $5.9 million investment in the stock during the quarter. The following funds were also among the new IBKR investors: Alec Litowitz and Ross Laser’s Magnetar Capital, Thomas Lee’s Lee Capital Management, and Ran Pang’s Quantamental Technologies.

Let’s also examine hedge fund activity in other stocks similar to Interactive Brokers Group, Inc. (NASDAQ:IBKR). These stocks are HubSpot Inc (NYSE:HUBS), Coca-Cola Europacific Partners PLC (NASDAQ:CCEP), Deutsche Bank Aktiengesellschaft (NYSE:DB), Laboratory Corp. of America Holdings (NYSE:LH), Hess Corporation (NYSE:HES), Tyson Foods, Inc. (NYSE:TSN), and Fifth Third Bancorp (NASDAQ:FITB). This group of stocks’ market caps match IBKR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HUBS 54 2674601 8
CCEP 31 1300875 6
DB 20 1860258 4
LH 53 2555270 -1
HES 31 615716 5
TSN 33 743751 5
FITB 41 360346 3
Average 37.6 1444402 4.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.6 hedge funds with bullish positions and the average amount invested in these stocks was $1444 million. That figure was $1482 million in IBKR’s case. HubSpot Inc (NYSE:HUBS) is the most popular stock in this table. On the other hand Deutsche Bank Aktiengesellschaft (NYSE:DB) is the least popular one with only 20 bullish hedge fund positions. Interactive Brokers Group, Inc. (NASDAQ:IBKR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IBKR is 62.7. 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. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. A small number of hedge funds were also right about betting on IBKR as the stock returned 9.6% since the end of the second quarter (through 10/11) and outperformed the market by an even larger margin.

Follow Interactive Brokers Group Inc. (NASDAQ:IBKR)

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