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Were Hedge Funds Right About Piling Into Corelogic Inc (CLGX)?

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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Corelogic Inc (NYSE:CLGX) and determine whether the smart money was really smart about this stock.

Is Corelogic Inc (NYSE:CLGX) the right pick for your portfolio? Investors who are in the know were becoming more confident. The number of long hedge fund bets improved by 3 lately. Our calculations also showed that CLGX 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

COATUE MANAGEMENT

Philippe Laffont of Coatue Management

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. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this tiny lithium stock. Now let’s take a look at the recent hedge fund action encompassing Corelogic Inc (NYSE:CLGX).

How are hedge funds trading Corelogic Inc (NYSE:CLGX)?

Heading into the second quarter of 2020, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CLGX over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CLGX A Good Stock To Buy?

The largest stake in Corelogic Inc (NYSE:CLGX) was held by D E Shaw, which reported holding $76.4 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $46.7 million position. Other investors bullish on the company included Nitorum Capital, Renaissance Technologies, and Millennium Management. In terms of the portfolio weights assigned to each position Nitorum Capital allocated the biggest weight to Corelogic Inc (NYSE:CLGX), around 3.33% of its 13F portfolio. Blue Grotto Capital is also relatively very bullish on the stock, dishing out 2.99 percent of its 13F equity portfolio to CLGX.

As aggregate interest increased, key money managers were breaking ground themselves. Engineers Gate Manager, managed by Greg Eisner, assembled the most outsized position in Corelogic Inc (NYSE:CLGX). Engineers Gate Manager had $1.3 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Qing Li’s Sciencast Management, Donald Sussman’s Paloma Partners, and Michael Gelband’s ExodusPoint Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Corelogic Inc (NYSE:CLGX) but similarly valued. We will take a look at Brady Corp (NYSE:BRC), Nordstrom, Inc. (NYSE:JWN), F.N.B. Corp (NYSE:FNB), and Umpqua Holdings Corp (NASDAQ:UMPQ). All of these stocks’ market caps match CLGX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BRC 10 140433 -5
JWN 25 72883 -5
FNB 24 63920 1
UMPQ 23 183885 7
Average 20.5 115280 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $253 million in CLGX’s case. Nordstrom, Inc. (NYSE:JWN) is the most popular stock in this table. On the other hand Brady Corp (NYSE:BRC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Corelogic Inc (NYSE:CLGX) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 12.3% in 2020 through June 30th but still managed to beat the market by 15.5 percentage points. Hedge funds were also right about betting on CLGX as the stock returned 121.1% in Q2 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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