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 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Intercontinental Exchange Inc (NYSE:ICE) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Intercontinental Exchange Inc (NYSE:ICE) has experienced a decrease in support from the world’s most elite money managers in recent months. Intercontinental Exchange Inc (NYSE:ICE) was in 53 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 64. There were 64 hedge funds in our database with ICE holdings at the end of September. Our calculations also showed that ICE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. 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 homepage (or at the end of this article). Keeping this in mind let’s take a peek at the key hedge fund action regarding Intercontinental Exchange Inc (NYSE:ICE).
Do Hedge Funds Think ICE Is A Good Stock To Buy Now?
At the end of December, a total of 53 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ICE over the last 22 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, ARK Investment Management held the most valuable stake in Intercontinental Exchange Inc (NYSE:ICE), which was worth $525.5 million at the end of the fourth quarter. On the second spot was Cantillon Capital Management which amassed $508 million worth of shares. D E Shaw, Alkeon Capital Management, and Ako Capital 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 Truvvo Partners allocated the biggest weight to Intercontinental Exchange Inc (NYSE:ICE), around 28.73% of its 13F portfolio. Isomer Partners is also relatively very bullish on the stock, dishing out 6.22 percent of its 13F equity portfolio to ICE.
Seeing as Intercontinental Exchange Inc (NYSE:ICE) has witnessed declining sentiment from hedge fund managers, logic holds that there lies a certain “tier” of fund managers that decided to sell off their positions entirely last quarter. Intriguingly, Rick Slocum’s Harvard Management Co said goodbye to the biggest position of all the hedgies tracked by Insider Monkey, comprising close to $116.2 million in stock. Renaissance Technologies, also dumped its stock, about $69.6 million worth. These moves are interesting, as total hedge fund interest was cut by 11 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Intercontinental Exchange Inc (NYSE:ICE) but similarly valued. We will take a look at Truist Financial Corporation (NYSE:TFC), Illinois Tool Works Inc. (NYSE:ITW), Global Payments Inc (NYSE:GPN), Equinix Inc (REIT) (NASDAQ:EQIX), The PNC Financial Services Group Inc. (NYSE:PNC), Brookfield Asset Management Inc. (NYSE:BAM), and Ecolab Inc. (NYSE:ECL). This group of stocks’ market values resemble ICE’s market value.
|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 42.1 hedge funds with bullish positions and the average amount invested in these stocks was $1822 million. That figure was $3273 million in ICE’s case. Global Payments Inc (NYSE:GPN) is the most popular stock in this table. On the other hand The PNC Financial Services Group Inc. (NYSE:PNC) is the least popular one with only 35 bullish hedge fund positions. Intercontinental Exchange Inc (NYSE:ICE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ICE is 63.8. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately ICE wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on ICE were disappointed as the stock returned -3.3% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Intercontinentalexchange Inc (NYSE:ICE)
Follow Intercontinentalexchange Inc (NYSE:ICE)
Disclosure: None. This article was originally published at Insider Monkey.