We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Canadian Imperial Bank of Commerce (NYSE:CM) based on that data.
Is CM a good stock to buy now? Prominent investors were turning bullish. The number of bullish hedge fund bets improved by 6 in recent months. Canadian Imperial Bank of Commerce (NYSE:CM) was in 12 hedge funds’ portfolios at the end of September. The all time high for this statistics is 20. Our calculations also showed that CM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 6 hedge funds in our database with CM positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let’s take a peek at the new hedge fund action regarding Canadian Imperial Bank of Commerce (NYSE:CM).
Do Hedge Funds Think CM Is A Good Stock To Buy Now?
At the end of September, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the second quarter of 2020. On the other hand, there were a total of 17 hedge funds with a bullish position in CM a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Canadian Imperial Bank of Commerce (NYSE:CM), which was worth $68.1 million at the end of the third quarter. On the second spot was Galibier Capital Management which amassed $46.7 million worth of shares. Citadel Investment Group, Two Sigma Advisors, and GLG Partners 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 Galibier Capital Management allocated the biggest weight to Canadian Imperial Bank of Commerce (NYSE:CM), around 10.99% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.07 percent of its 13F equity portfolio to CM.
As aggregate interest increased, key money managers have been driving this bullishness. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the most outsized position in Canadian Imperial Bank of Commerce (NYSE:CM). Two Sigma Advisors had $12.4 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $5.7 million investment in the stock during the quarter. The other funds with brand new CM positions are Dmitry Balyasny’s Balyasny Asset Management, Michael Gelband’s ExodusPoint Capital, and Donald Sussman’s Paloma Partners.
Let’s go over hedge fund activity in other stocks similar to Canadian Imperial Bank of Commerce (NYSE:CM). These stocks are Ross Stores, Inc. (NASDAQ:ROST), Capital One Financial Corp. (NYSE:COF), Synopsys, Inc. (NASDAQ:SNPS), Mizuho Financial Group Inc. (NYSE:MFG), Amphenol Corporation (NYSE:APH), TE Connectivity Ltd. (NYSE:TEL), and SYSCO Corporation (NYSE:SYY). This group of stocks’ market caps are similar to CM’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.3 hedge funds with bullish positions and the average amount invested in these stocks was $1391 million. That figure was $156 million in CM’s case. Amphenol Corporation (NYSE:APH) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 5 bullish hedge fund positions. Canadian Imperial Bank of Commerce (NYSE:CM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CM is 36. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CM as the stock returned 16.5% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.