Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Intercontinental Exchange Inc (NYSE:ICE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Intercontinental Exchange Inc (NYSE:ICE) a bargain? Hedge funds are selling. The number of long hedge fund bets decreased by 5 in recent months. ICE was in 38 hedge funds’ portfolios at the end of the third quarter of 2015. There were 43 hedge funds in our database with ICE holdings at the end of the previous quarter. At the end of this article we will also compare ICE to other stocks including PG&E Corporation (NYSE:PCG), Exelon Corporation (NYSE:EXC), and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) to get a better sense of its popularity.
In the financial world there are a large number of signals investors have at their disposal to assess their stock investments. Some of the most innovative signals are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the broader indices by a healthy margin (see the details here).
Now, we’re going to analyze the latest action regarding Intercontinental Exchange Inc (NYSE:ICE).
How have hedgies been trading Intercontinental Exchange Inc (NYSE:ICE)?
Heading into Q4, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jonathon Jacobson’s Highfields Capital Management has the biggest position in Intercontinental Exchange Inc (NYSE:ICE), worth close to $530.2 million, comprising 4.7% of its total 13F portfolio. The second most bullish fund manager is Cantillon Capital Management, managed by William von Mueffling, which holds a $248.9 million position; the fund has 5.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass Panayotis Takis Sparaggis’s Alkeon Capital Management, Jacob Doft’s Highline Capital Management and Ricky Sandler’s Eminence Capital.
Judging by the fact that Intercontinental Exchange Inc (NYSE:ICE) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there were a few money managers that elected to cut their full holdings last quarter. It’s worth mentioning that Keith Meister’s Corvex Capital dumped the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth close to $271.4 million in stock, and Columbus Circle Investors was right behind this move, as the fund dropped about $59.8 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Intercontinental Exchange Inc (NYSE:ICE) but similarly valued. These stocks are PG&E Corporation (NYSE:PCG), Exelon Corporation (NYSE:EXC), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), and Illumina, Inc. (NASDAQ:ILMN). This group of stocks’ market values are similar to ICE’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 43.25 hedge funds with bullish positions and the average amount invested in these stocks was $1292 million. That figure was $2017 million in ICE’s case. Illumina, Inc. (NASDAQ:ILMN) is the most popular stock in this table. On the other hand PG&E Corporation (NYSE:PCG) is the least popular one with only 20 bullish hedge fund positions. Intercontinental Exchange Inc (NYSE:ICE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ILMN might be a better candidate to consider a long position.