Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in CBRE Group Inc (NYSE:CBG)? The smart money sentiment can provide an answer to this question.
Is CBRE Group Inc (NYSE:CBG) a healthy stock for your portfolio? The smart money is taking an optimistic view. The number of bullish hedge fund positions rose by 6 in recent months. CBG was in 34 hedge funds’ portfolios at the end of September. There were 28 hedge funds in our database with CBG positions at the end of the previous quarter. 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 ResMed Inc. (NYSE:RMD), Shaw Communications Inc (USA) (NYSE:SJR), and Cheniere Energy, Inc. (NYSEAMEX:LNG) to gather more data points.
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Now, we’re going to analyze the latest action regarding CBRE Group Inc (NYSE:CBG).
How have hedgies been trading CBRE Group Inc (NYSE:CBG)?
At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a surge of 21% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jeffrey Ubben’s ValueAct Capital has the biggest position in CBRE Group Inc (NYSE:CBG), worth close to $968.7 million and corresponding to 8.4% of its total 13F portfolio. The second largest stake is held by Cantillon Capital Management, led by William von Mueffling, which holds a $237.6 million position; the fund has 3.4% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Ricky Sandler’s Eminence Capital, Scott McLellan’s Marble Arch Investments and John W. Rogers’s Ariel Investments.
Consequently, key money managers have jumped into CBRE Group Inc (NYSE:CBG) headfirst. Eminence Capital, managed by Ricky Sandler, established the biggest position in CBRE Group Inc (NYSE:CBG). The fund had $126.5 million invested in the company at the end of the quarter according to its latest 13F filing. Anthony Bozza’s Lakewood Capital Management also initiated a $67.9 million position during the quarter. The other funds with new positions in the stock are John Smith Clark’s Southpoint Capital Advisors, Christopher Lord’s Criterion Capital, and Alan Fournier’s Pennant Capital Management.
Let’s go over hedge fund activity in other stocks similar to CBRE Group Inc (NYSE:CBG). We will take a look at ResMed Inc. (NYSE:RMD), Shaw Communications Inc (USA) (NYSE:SJR), Cheniere Energy, Inc. (NYSEAMEX:LNG), and Stericycle Inc (NASDAQ:SRCL). This group of stocks’ market caps match CBG’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 24 hedge funds with bullish positions and the average amount invested in these stocks was $1.38 billion. That figure was $1.89 billion in CBG’s case. Cheniere Energy, Inc. (NYSEAMEX:LNG) is the most popular stock in this table. On the other hand Shaw Communications Inc (USA) (NYSE:SJR) is the least popular one with only 9 bullish hedge fund positions. CBRE Group Inc (NYSE:CBG) 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 LNG might be a better candidate to consider a long position.