The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider CDW Corp (NASDAQ:CDW) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is CDW Corp (NASDAQ:CDW) undervalued? Investors who are in the know are turning bullish. The number of long hedge fund positions improved by 2 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Brixmor Property Group Inc (NYSE:BRX), Signature Bank (NASDAQ:SBNY), and Vereit Inc (NYSE:VER) to gather more data points.
To the average investor there are plenty of methods stock traders employ to appraise their stock investments. A pair of the less known methods are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the S&P 500 by a healthy amount (see the details here).
With all of this in mind, let’s analyze the new action surrounding CDW Corp (NASDAQ:CDW).
Hedge fund activity in CDW Corp (NASDAQ:CDW)
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Makaira Partners, managed by Thomas Bancroft, holds the most valuable position in CDW Corp (NASDAQ:CDW). Makaira Partners has a $95.8 million position in the stock, comprising 15.6% of its 13F portfolio. Sitting at the No. 2 spot is Lakewood Capital Management, managed by Anthony Bozza, which holds a $65.2 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions include D E Shaw, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, created the largest position in CDW Corp (NASDAQ:CDW). LMR Partners had $4.3 million invested in the company at the end of the quarter. Jim Simons’ Renaissance Technologies also made a $3.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Peter Muller’s PDT Partners, and Simon Sadler’s Segantii Capital.
Let’s now take a look at hedge fund activity in other stocks similar to CDW Corp (NASDAQ:CDW). We will take a look at Brixmor Property Group Inc (NYSE:BRX), Signature Bank (NASDAQ:SBNY), Vereit Inc (NYSE:VER), and Skechers USA Inc (NYSE:SKX). This group of stocks’ market caps are closest to CDW’s market cap.
|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 28.5 hedge funds with bullish positions and the average amount invested in these stocks was $649 million. That figure was $511 million in CDW’s case. Vereit Inc (NYSE:VER) is the most popular stock in this table. On the other hand Brixmor Property Group Inc (NYSE:BRX) is the least popular one with only 9 bullish hedge fund positions. CDW Corp (NASDAQ:CDW) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VER might be a better candidate to consider a long position.