CBRE Group Inc (CBG): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

If you were to ask many of your peers, hedge funds are perceived as bloated, old financial vehicles of an era lost to time. Although there are more than 8,000 hedge funds in operation today, Insider Monkey focuses on the bigwigs of this club, around 525 funds. Analysts calculate that this group controls the lion’s share of all hedge funds’ total capital, and by monitoring their highest quality picks, we’ve determined a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 (see all of our picks from August).

Equally as necessary, optimistic insider trading sentiment is another way to look at the stock market universe. As the old adage goes: there are a variety of motivations for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand where to look (learn more here).

Keeping this in mind, let’s examine the latest info for CBRE Group Inc (NYSE:CBG).

What does the smart money think about CBRE Group Inc (NYSE:CBG)?

Heading into Q3, a total of 23 of the hedge funds we track held long positions in this stock, a change of -15% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.

According to our 13F database, ValueAct Capital, managed by Jeffrey Ubben, holds the largest position in CBRE Group Inc (NYSE:CBG). ValueAct Capital has a $747.6 million position in the stock, comprising 7.7% of its 13F portfolio. Coming in second is Richard Blum of Blum Capital Partners, with a $351.2 million position; the fund has 57.3% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Robert Joseph Caruso’s Select Equity Group, James Dinan’s York Capital Management and Christopher Medlock James’s Partner Fund Management.

Since CBRE Group Inc (NYSE:CBG) has faced declining interest from the entirety of the hedge funds we track, it’s easy to see that there were a few hedge funds that slashed their positions entirely last quarter. Interestingly, Lee Hobson’s Highside Capital Management dropped the biggest position of the “upper crust” of funds we watch, worth about $13.3 million in stock. Michael Karsch’s fund, Karsch Capital Management, also said goodbye to its stock, about $6.5 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 4 funds last quarter.

What have insiders been doing with CBRE Group Inc (NYSE:CBG)?

Bullish insider trading is best served when the company in question has experienced transactions within the past six months. Over the latest 180-day time frame, CBRE Group Inc (NYSE:CBG) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to CBRE Group Inc (NYSE:CBG). These stocks are Forest City Enterprises, Inc. (NYSE:FCE-A), Jones Lang LaSalle Inc (NYSE:JLL), Icahn Enterprises LP (NASDAQ:IEP), Realogy Holdings Corp (NYSE:RLGY), and Brookfield Office Properties Inc (USA) (NYSE:BPO). This group of stocks belong to the property management industry and their market caps match CBG’s market cap.

Using the returns explained by our tactics, regular investors should always pay attention to hedge fund and insider trading sentiment, and CBRE Group Inc (NYSE:CBG) is no exception.

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