We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Colliers International Group Inc (NASDAQ:CIGI) and determine whether hedge funds skillfully traded this stock.
Is Colliers International Group Inc (NASDAQ:CIGI) a buy right now? Prominent investors were in a bearish mood. The number of long hedge fund positions were cut by 3 lately. Our calculations also showed that CIGI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, Our researchers hone in on the aristocrats of this group, approximately 850 funds. These investment experts handle the lion’s share of the hedge fund industry’s total asset base, and by tailing their highest performing picks, Insider Monkey has discovered many investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s analyze the fresh hedge fund action regarding Colliers International Group Inc (NASDAQ:CIGI).
How have hedgies been trading Colliers International Group Inc (NASDAQ:CIGI)?
At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -23% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CIGI over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Zachary Sternberg and Benjamin Stein’s Spruce House Investment Management has the most valuable position in Colliers International Group Inc (NASDAQ:CIGI), worth close to $274.1 million, corresponding to 17.3% of its total 13F portfolio. On Spruce House Investment Management’s heels is BloombergSen, managed by Jonathan Bloomberg, which holds a $105.6 million position; 9.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish contain Renaissance Technologies, D. E. Shaw’s D E Shaw and Paul Marshall and Ian Wace’s Marshall Wace LLP. 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 17.31% of its 13F portfolio. BloombergSen is also relatively very bullish on the stock, dishing out 9.09 percent of its 13F equity portfolio to CIGI.
Due to the fact that Colliers International Group Inc (NASDAQ:CIGI) has faced falling interest from the smart money, it’s easy to see that there exists a select few fund managers who sold off their entire stakes heading into Q4. Intriguingly, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors dumped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling close to $3.9 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $3.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 3 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Colliers International Group Inc (NASDAQ:CIGI) but similarly valued. We will take a look at Easterly Government Properties Inc (NYSE:DEA), Sensient Technologies Corporation (NYSE:SXT), Olin Corporation (NYSE:OLN), and The Simply Good Foods Company (NASDAQ:SMPL). All of these stocks’ market caps resemble CIGI’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 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $204 million. That figure was $438 million in CIGI’s case. Olin Corporation (NYSE:OLN) is the most popular stock in this table. On the other hand Easterly Government Properties Inc (NYSE:DEA) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Colliers International Group Inc (NASDAQ:CIGI) is even less popular than DEA. Hedge funds dodged a bullet by taking a bearish stance towards CIGI. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but managed to beat the market by 15.5 percentage points. Unfortunately CIGI wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); CIGI investors were disappointed as the stock returned 19.5% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.