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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards CDW Corporation (NASDAQ:CDW).
CDW Corporation (NASDAQ:CDW) shareholders have witnessed a decrease in enthusiasm from smart money of late. CDW Corporation (NASDAQ:CDW) was in 30 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 43. There were 43 hedge funds in our database with CDW holdings at the end of December. Our calculations also showed that CDW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Thomas Bancroft of Makaira Partners
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Do Hedge Funds Think CDW Is A Good Stock To Buy Now?
At first quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -30% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CDW over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Select Equity Group, managed by Robert Joseph Caruso, holds the biggest position in CDW Corporation (NASDAQ:CDW). Select Equity Group has a $1.3754 billion position in the stock, comprising 5% of its 13F portfolio. The second largest stake is held by Gobi Capital, managed by Bo Shan, which holds a $115.3 million position; the fund has 7.8% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish comprise Cliff Asness’s AQR Capital Management, Thomas Bancroft’s Makaira Partners and Peter Lewis’s LFL Advisers. In terms of the portfolio weights assigned to each position LFL Advisers allocated the biggest weight to CDW Corporation (NASDAQ:CDW), around 22.72% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, setting aside 10.12 percent of its 13F equity portfolio to CDW.
Because CDW Corporation (NASDAQ:CDW) has experienced a decline in interest from hedge fund managers, it’s easy to see that there exists a select few hedgies that slashed their entire stakes heading into Q2. Interestingly, Robert Pohly’s Samlyn Capital sold off the largest investment of all the hedgies tracked by Insider Monkey, valued at about $64.9 million in stock, and Jeffrey Ubben’s ValueAct Capital was right behind this move, as the fund sold off about $48.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 13 funds heading into Q2.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CDW Corporation (NASDAQ:CDW) but similarly valued. These stocks are Zscaler, Inc. (NASDAQ:ZS), PG&E Corporation (NYSE:PCG), Arista Networks Inc (NYSE:ANET), Yandex NV (NASDAQ:YNDX), Li Auto Inc. (NASDAQ:LI), United Microelectronics Corp (NYSE:UMC), and ONEOK, Inc. (NYSE:OKE). This group of stocks’ market valuations are closest to CDW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZS | 34 | 809507 | -1 |
| PCG | 65 | 5665287 | -1 |
| ANET | 26 | 253852 | -9 |
| YNDX | 29 | 1260108 | -5 |
| LI | 18 | 493824 | -13 |
| UMC | 11 | 173050 | -1 |
| OKE | 20 | 67349 | -2 |
| Average | 29 | 1246140 | -4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $1246 million. That figure was $1909 million in CDW’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand United Microelectronics Corp (NYSE:UMC) is the least popular one with only 11 bullish hedge fund positions. CDW Corporation (NASDAQ:CDW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CDW is 30.5. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately CDW wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CDW were disappointed as the stock returned 7% since the end of March (through 7/2) 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 many of these stocks already outperformed the market since 2019.
Follow Cdw Corp (NASDAQ:CDW)
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Disclosure: None. This article was originally published at Insider Monkey.
