We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31st. We at Insider Monkey have made an extensive database of more than 835 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Colliers International Group Inc (NASDAQ:CIGI) based on those filings.
Colliers International Group Inc (NASDAQ:CIGI) has seen an increase in enthusiasm from smart money recently. CIGI was in 13 hedge funds’ portfolios at the end of December. There were 11 hedge funds in our database with CIGI positions at the end of the previous quarter. Our calculations also showed that CIGI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Prem Watsa of Fairfax Financial Holdings
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the latest hedge fund action surrounding Colliers International Group Inc (NASDAQ:CIGI).
What have hedge funds been doing with Colliers International Group Inc (NASDAQ:CIGI)?
At the end of the fourth quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in CIGI a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Spruce House Investment Management was the largest shareholder of Colliers International Group Inc (NASDAQ:CIGI), with a stake worth $465.8 million reported as of the end of September. Trailing Spruce House Investment Management was BloombergSen, which amassed a stake valued at $191.8 million. Renaissance Technologies, D E Shaw, and Two Sigma Advisors 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 Spruce House Investment Management allocated the biggest weight to Colliers International Group Inc (NASDAQ:CIGI), around 15.21% of its 13F portfolio. BloombergSen is also relatively very bullish on the stock, dishing out 9.81 percent of its 13F equity portfolio to CIGI.
Now, key money managers were breaking ground themselves. Waratah Capital Advisors, managed by Brad Dunkley and Blair Levinsky, initiated the most outsized position in Colliers International Group Inc (NASDAQ:CIGI). Waratah Capital Advisors had $3.9 million invested in the company at the end of the quarter. Prem Watsa’s Fairfax Financial Holdings also initiated a $1.9 million position during the quarter.
Let’s now review hedge fund activity in other stocks similar to Colliers International Group Inc (NASDAQ:CIGI). These stocks are EnLink Midstream LLC (NYSE:ENLC), Agree Realty Corporation (NYSE:ADC), Cohen & Steers, Inc. (NYSE:CNS), and Ameris Bancorp (NASDAQ:ABCB). This group of stocks’ market values resemble CIGI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ENLC | 11 | 27563 | -1 |
| ADC | 18 | 228867 | 7 |
| CNS | 16 | 94094 | 0 |
| ABCB | 16 | 160287 | 0 |
| Average | 15.25 | 127703 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $757 million in CIGI’s case. Agree Realty Corporation (NYSE:ADC) is the most popular stock in this table. On the other hand EnLink Midstream LLC (NYSE:ENLC) is the least popular one with only 11 bullish hedge fund positions. Colliers International Group Inc (NASDAQ:CIGI) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but beat the market by 5.5 percentage points. Unfortunately CIGI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CIGI investors were disappointed as the stock returned -33.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in Q1.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
