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Were Hedge Funds Right About Flocking Into Colliers International Group Inc (CIGI) ?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Colliers International Group Inc (NASDAQ:CIGI) was in 13 hedge funds’ portfolios at the end of the fourth quarter of 2018. CIGI shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 11 hedge funds in our database with CIGI holdings at the end of the previous quarter. Our calculations also showed that cigi isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

D. E. Shaw

Let’s take a gander at the fresh hedge fund action surrounding Colliers International Group Inc (NASDAQ:CIGI).

Hedge fund activity in Colliers International Group Inc (NASDAQ:CIGI)

At Q4’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the second quarter of 2018. By comparison, 7 hedge funds held shares or bullish call options in CIGI a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

No of Hedge Funds with CIGI Positions

More specifically, Spruce House Investment Management was the largest shareholder of Colliers International Group Inc (NASDAQ:CIGI), with a stake worth $330.4 million reported as of the end of September. Trailing Spruce House Investment Management was BloombergSen, which amassed a stake valued at $121 million. Renaissance Technologies, Waratah Capital Advisors, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.

As one would reasonably expect, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, created the most valuable position in Colliers International Group Inc (NASDAQ:CIGI). Millennium Management had $1.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $1.1 million investment in the stock during the quarter. The following funds were also among the new CIGI investors: Paul Marshall and Ian Wace’s Marshall Wace LLP and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now take a look at 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 Antero Midstream Corporation (NYSE:AMGP), Terreno Realty Corporation (NYSE:TRNO), MGE Energy, Inc. (NASDAQ:MGEE), and Mantech International Corp (NASDAQ:MANT). This group of stocks’ market valuations are similar to CIGI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AMGP 15 168765 -2
TRNO 10 29454 -2
MGEE 12 33681 4
MANT 10 7768 -4
Average 11.75 59917 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $540 million in CIGI’s case. Antero Midstream Corporation (NYSE:AMGP) is the most popular stock in this table. On the other hand Terreno Realty Corporation (NYSE:TRNO) is the least popular one with only 10 bullish hedge fund positions. Colliers International Group Inc (NASDAQ:CIGI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on CIGI as the stock returned 25.2% and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.

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