Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of CBOE Global Markets Inc (NASDAQ:CBOE) based on that data and determine whether they were really smart about the stock.
CBOE Global Markets Inc (NASDAQ:CBOE) was in 35 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. CBOE has experienced an increase in hedge fund sentiment of late. There were 31 hedge funds in our database with CBOE positions at the end of the second quarter. Our calculations also showed that CBOE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s analyze the fresh hedge fund action surrounding CBOE Global Markets Inc (NASDAQ:CBOE).
Paul Tudor Jones of Tudor Investment Corp
Do Hedge Funds Think CBOE Is A Good Stock To Buy Now?
At Q3’s end, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. By comparison, 33 hedge funds held shares or bullish call options in CBOE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of CBOE Global Markets Inc (NASDAQ:CBOE), with a stake worth $304 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $111.7 million. Balyasny Asset Management, Schonfeld Strategic Advisors, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Truvvo Partners allocated the biggest weight to CBOE Global Markets Inc (NASDAQ:CBOE), around 12.96% of its 13F portfolio. Full18 Capital is also relatively very bullish on the stock, earmarking 2.61 percent of its 13F equity portfolio to CBOE.
As industrywide interest jumped, some big names have been driving this bullishness. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, created the biggest position in CBOE Global Markets Inc (NASDAQ:CBOE). Senator Investment Group had $37.2 million invested in the company at the end of the quarter. Peter Seuss’s Prana Capital Management also made a $10.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Allon Hellmann’s Full18 Capital, Ravi Chopra’s Azora Capital, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as CBOE Global Markets Inc (NASDAQ:CBOE) but similarly valued. These stocks are Williams-Sonoma, Inc. (NYSE:WSM), Advance Auto Parts, Inc. (NYSE:AAP), Packaging Corporation Of America (NYSE:PKG), Telefonica Brasil SA (NYSE:VIV), The J.M. Smucker Company (NYSE:SJM), W.R. Berkley Corporation (NYSE:WRB), and Fidelity National Financial Inc (NYSE:FNF). All of these stocks’ market caps match CBOE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WSM | 31 | 730615 | -3 |
| AAP | 35 | 899336 | 1 |
| PKG | 26 | 281022 | -5 |
| VIV | 5 | 42334 | -4 |
| SJM | 25 | 506030 | -9 |
| WRB | 26 | 593633 | -10 |
| FNF | 32 | 1390536 | -2 |
| Average | 25.7 | 634787 | -4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $635 million. That figure was $971 million in CBOE’s case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand Telefonica Brasil SA (NYSE:VIV) is the least popular one with only 5 bullish hedge fund positions. CBOE Global Markets Inc (NASDAQ:CBOE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CBOE is 86.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, CBOE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CBOE were disappointed as the stock returned -4.3% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Cboe Global Markets Inc. (NASDAQ:CBOE)
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Disclosure: None. This article was originally published at Insider Monkey.
