CBOE Holdings, Inc (CBOE): Are Hedge Funds Right About This Stock?

If you were to ask many market players, hedge funds are perceived as delayed, outdated financial tools of an era lost to time. Although there are over 8,000 hedge funds in operation in present day, Insider Monkey aim at the masters of this group, about 525 funds. It is widely held that this group has its hands on most of the smart money’s total assets, and by paying attention to their highest quality investments, we’ve identified a number of investment strategies that have historically outstripped the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as crucial, positive insider trading sentiment is another way to look at the stock market universe. Just as you’d expect, there are plenty of reasons for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this strategy if investors understand what to do (learn more here).

Now that that’s out of the way, let’s examine the recent info for CBOE Holdings, Inc (NASDAQ:CBOE).

How are hedge funds trading CBOE Holdings, Inc (NASDAQ:CBOE)?

At the end of the second quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of 7% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably.

Out of the hedge funds we follow, Horizon Asset Management, managed by Murray Stahl, holds the biggest position in CBOE Holdings, Inc (NASDAQ:CBOE). Horizon Asset Management has a $171.3 million position in the stock, comprising 2.5% of its 13F portfolio. On Horizon Asset Management’s heels is Renaissance Technologies, managed by Jim Simons, which held a $101.7 million position; 0.3% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Robert B. Gillam’s McKinley Capital Management, and Israel Englander’s Millennium Management.

Now, particular hedge funds were breaking ground themselves. Horizon Asset Management, managed by Murray Stahl, assembled the biggest position in CBOE Holdings, Inc (NASDAQ:CBOE). Horizon Asset Management had 171.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $101.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Robert B. Gillam’s McKinley Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Israel Englander’s Millennium Management.

What have insiders been doing with CBOE Holdings, Inc (NASDAQ:CBOE)?

Insider buying made by high-level executives is particularly usable when the company in focus has seen transactions within the past six months. Over the latest six-month time period, CBOE Holdings, Inc (NASDAQ:CBOE) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to CBOE Holdings, Inc (NASDAQ:CBOE). These stocks are Apollo Investment Corp. (NASDAQ:AINV), NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), Ares Capital Corporation (NASDAQ:ARCC), A.F.P Provida SA (ADR) (NYSE:PVD), and Apollo Global Management LLC (NYSE:APO). This group of stocks belong to the diversified investments industry and their market caps match CBOE’s market cap.

Using the returns shown by our tactics, average investors should always track hedge fund and insider trading sentiment, and CBOE Holdings, Inc (NASDAQ:CBOE) applies perfectly to this mantra.

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