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 873 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 June 30th. In this article we look at what those investors think of Ceridian HCM Holding Inc. (NYSE:CDAY).
Is Ceridian HCM Holding Inc. (NYSE:CDAY) worth your attention right now? Hedge funds were getting less optimistic. The number of bullish hedge fund bets retreated by 3 lately. Ceridian HCM Holding Inc. (NYSE:CDAY) was in 25 hedge funds’ portfolios at the end of June. The all time high for this statistic is 36. Our calculations also showed that CDAY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 28 hedge funds in our database with CDAY positions at the end of the first quarter.
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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to view the latest hedge fund action encompassing Ceridian HCM Holding Inc. (NYSE:CDAY).
Do Hedge Funds Think CDAY Is A Good Stock To Buy Now?
At the end of June, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from one quarter earlier. On the other hand, there were a total of 30 hedge funds with a bullish position in CDAY a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Select Equity Group held the most valuable stake in Ceridian HCM Holding Inc. (NYSE:CDAY), which was worth $960.6 million at the end of the second quarter. On the second spot was Ashe Capital which amassed $117 million worth of shares. Echo Street Capital Management, Alkeon Capital Management, and Candlestick Capital Management 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 Ashe Capital allocated the biggest weight to Ceridian HCM Holding Inc. (NYSE:CDAY), around 7.21% of its 13F portfolio. Nishkama Capital is also relatively very bullish on the stock, setting aside 6.97 percent of its 13F equity portfolio to CDAY.
Since Ceridian HCM Holding Inc. (NYSE:CDAY) has witnessed falling interest from the smart money, it’s safe to say that there were a few hedge funds who sold off their positions entirely heading into Q3. At the top of the heap, Amish Mehta’s SQN Investors dropped the largest position of all the hedgies followed by Insider Monkey, totaling close to $23.5 million in stock, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management was right behind this move, as the fund sold off about $7.2 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks similar to Ceridian HCM Holding Inc. (NYSE:CDAY). These stocks are Leidos Holdings Inc (NYSE:LDOS), RH (NYSE:RH), CenterPoint Energy, Inc. (NYSE:CNP), Signature Bank (NASDAQ:SBNY), WestRock Company (NYSE:WRK), GoodRx Holdings, Inc. (NASDAQ:GDRX), and Wynn Resorts, Limited (NASDAQ:WYNN). This group of stocks’ market valuations are similar to CDAY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LDOS | 22 | 170773 | 4 |
| RH | 54 | 4331314 | 4 |
| CNP | 20 | 287723 | -5 |
| SBNY | 43 | 787102 | 3 |
| WRK | 32 | 572106 | 5 |
| GDRX | 28 | 635923 | 4 |
| WYNN | 37 | 712498 | -12 |
| Average | 33.7 | 1071063 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.7 hedge funds with bullish positions and the average amount invested in these stocks was $1071 million. That figure was $1477 million in CDAY’s case. RH (NYSE:RH) is the most popular stock in this table. On the other hand CenterPoint Energy, Inc. (NYSE:CNP) is the least popular one with only 20 bullish hedge fund positions. Ceridian HCM Holding Inc. (NYSE:CDAY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CDAY is 30.2. 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. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on CDAY as the stock returned 33.5% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
