Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Cincinnati Financial Corporation (CINF) A Good Stock To Buy?

It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Cincinnati Financial Corporation (NASDAQ:CINF) during the quarter below.

Cincinnati Financial Corporation (NASDAQ:CINF) shareholders have witnessed an increase in hedge fund sentiment recently. At the end of this article, we will also compare Cincinnati Financial Corporation (NASDAQ:CINF) to other stocks, including Quest Diagnostics Inc (NYSE:DGX), Cemex SAB de CV (ADR) (NYSE:CX), and Snap-on Incorporated (NYSE:SNA) to get a better sense of its popularity.

Follow Cincinnati Financial Corp (NASDAQ:CINF)
Trade (NASDAQ:CINF) Now!

In today’s marketplace, there are a large number of formulas shareholders use to value stocks. A couple of the most innovative formulas are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite money managers can outclass the broader indices by a healthy amount (see the details here).

Keeping this in mind, let’s view the key action surrounding Cincinnati Financial Corporation (NASDAQ:CINF).

How have hedgies been trading Cincinnati Financial Corporation (NASDAQ:CINF)?

At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 35% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Winton Capital Management, managed by David Harding, holds the biggest position in Cincinnati Financial Corporation (NASDAQ:CINF). Winton Capital Management has a $28.9 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by D E Shaw, with an $18.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Chuck Royce’s Royce & Associates, and Ken Fisher’s Fisher Asset Management.

Now, some big names were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Cincinnati Financial Corporation (NASDAQ:CINF). Citadel Investment Group had $2.2 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also made a $1 million investment in the stock during the quarter. The following funds were also among the new Cincinnati Financial Corporation (NASDAQ:CINF) investors: Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Peter Muller’s PDT Partners, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s go over hedge fund activity in other stocks similar to Cincinnati Financial Corporation (NASDAQ:CINF). We will take a look at Quest Diagnostics Inc (NYSE:DGX), Cemex SAB de CV (ADR) (NYSE:CX), Snap-on Incorporated (NYSE:SNA), and Voya Financial Inc (NYSE:VOYA). This group of stocks’ market values resembles Cincinnati Financial Corporation (NASDAQ:CINF)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DGX 27 317876 -5
CX 18 186344 -3
SNA 31 585872 6
VOYA 35 1097599 -5

As you can see, these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $547 million. That figure was $653 million in Cincinnati Financial Corporation (NASDAQ:CINF)’s case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table. On the other hand, Cemex SAB de CV (ADR) (NYSE:CX) is the least popular one with only 18 bullish hedge fund positions. Cincinnati Financial Corporation (NASDAQ:CINF) 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, Voya Financial Inc (NYSE:VOYA) might be a better candidate to consider a long position.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...