With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was CoStar Group Inc (NASDAQ:CSGP).
Is CoStar Group Inc (NASDAQ:CSGP) going to take off soon? Investors who are in the know were in an optimistic mood. The number of long hedge fund positions advanced by 6 lately. CoStar Group Inc (NASDAQ:CSGP) was in 49 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 55. Our calculations also showed that CSGP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Charles Akre of Akre Capital Management
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Do Hedge Funds Think CSGP Is A Good Stock To Buy Now?
At second quarter’s end, a total of 49 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the first quarter of 2020. By comparison, 50 hedge funds held shares or bullish call options in CSGP 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.
More specifically, Akre Capital Management was the largest shareholder of CoStar Group Inc (NASDAQ:CSGP), with a stake worth $809 million reported as of the end of June. Trailing Akre Capital Management was Third Point, which amassed a stake valued at $469.7 million. Alkeon Capital Management, Bares Capital Management, and Millennium 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 Lakehouse Capital allocated the biggest weight to CoStar Group Inc (NASDAQ:CSGP), around 7.44% of its 13F portfolio. Wildcat Capital Management is also relatively very bullish on the stock, designating 6.14 percent of its 13F equity portfolio to CSGP.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, created the biggest position in CoStar Group Inc (NASDAQ:CSGP). Holocene Advisors had $61 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $43.1 million position during the quarter. The other funds with brand new CSGP positions are Jeffrey Hoffner’s Engle Capital, Robert Joseph Caruso’s Select Equity Group, and D. E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as CoStar Group Inc (NASDAQ:CSGP) but similarly valued. We will take a look at Corteva, Inc. (NYSE:CTVA), D.R. Horton, Inc. (NYSE:DHI), The Williams Companies, Inc. (NYSE:WMB), Mettler-Toledo International Inc. (NYSE:MTD), ArcelorMittal (NYSE:MT), V.F. Corporation (NYSE:VFC), and AutoZone, Inc. (NYSE:AZO). This group of stocks’ market values match CSGP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTVA | 34 | 1283913 | -1 |
| DHI | 45 | 1886955 | -5 |
| WMB | 39 | 551010 | 5 |
| MTD | 35 | 1267774 | 8 |
| MT | 22 | 1044502 | 1 |
| VFC | 32 | 1005658 | 1 |
| AZO | 34 | 545700 | 0 |
| Average | 34.4 | 1083645 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.4 hedge funds with bullish positions and the average amount invested in these stocks was $1084 million. That figure was $2817 million in CSGP’s case. D.R. Horton, Inc. (NYSE:DHI) is the most popular stock in this table. On the other hand ArcelorMittal (NYSE:MT) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks CoStar Group Inc (NASDAQ:CSGP) is more popular among hedge funds. Our overall hedge fund sentiment score for CSGP is 86.7. 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 returned 22.9% in 2021 through October 1st but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on CSGP as the stock returned 6% since the end of June (through 10/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Costar Group Inc. (NASDAQ:CSGP)
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Disclosure: None. This article was originally published at Insider Monkey.
