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 second 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 S&P Global Inc. (NYSE:SPGI) based on that data.
Is S&P Global Inc. (NYSE:SPGI) undervalued? The best stock pickers were turning bullish. The number of long hedge fund positions rose by 5 recently. S&P Global Inc. (NYSE:SPGI) was in 71 hedge funds’ portfolios at the end of June. The all time high for this statistic is 76. Our calculations also showed that SPGI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 66 hedge funds in our database with SPGI holdings at the end of March.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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. Now let’s review the fresh hedge fund action regarding S&P Global Inc. (NYSE:SPGI).
Do Hedge Funds Think SPGI Is A Good Stock To Buy Now?
At second quarter’s end, a total of 71 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in SPGI over the last 24 quarters. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, TCI Fund Management was the largest shareholder of S&P Global Inc. (NYSE:SPGI), with a stake worth $2402.6 million reported as of the end of June. Trailing TCI Fund Management was Cantillon Capital Management, which amassed a stake valued at $971.6 million. Valley Forge Capital, Third Point, 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 Rings Capital Management allocated the biggest weight to S&P Global Inc. (NYSE:SPGI), around 43.42% of its 13F portfolio. Valley Forge Capital is also relatively very bullish on the stock, designating 20.29 percent of its 13F equity portfolio to SPGI.
As one would reasonably expect, some big names have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, initiated the most valuable call position in S&P Global Inc. (NYSE:SPGI). Holocene Advisors had $57.3 million invested in the company at the end of the quarter. Peter Seuss’s Prana Capital Management also made a $43.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Leon Shaulov’s Maplelane Capital, and Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks similar to S&P Global Inc. (NYSE:SPGI). These stocks are Stryker Corporation (NYSE:SYK), Micron Technology, Inc. (NASDAQ:MU), Moderna, Inc. (NASDAQ:MRNA), Uber Technologies, Inc. (NYSE:UBER), Anthem Inc (NYSE:ANTM), Lam Research Corporation (NASDAQ:LRCX), and Airbnb, Inc. (NASDAQ:ABNB). This group of stocks’ market caps resemble SPGI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SYK | 48 | 3369193 | 2 |
| MU | 87 | 6333058 | -13 |
| MRNA | 37 | 5754554 | -2 |
| UBER | 135 | 10412577 | 5 |
| ANTM | 67 | 4838358 | 9 |
| LRCX | 58 | 3719258 | 4 |
| ABNB | 58 | 2711062 | 6 |
| Average | 70 | 5305437 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 70 hedge funds with bullish positions and the average amount invested in these stocks was $5305 million. That figure was $7278 million in SPGI’s case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand Moderna, Inc. (NASDAQ:MRNA) is the least popular one with only 37 bullish hedge fund positions. S&P Global Inc. (NYSE:SPGI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SPGI is 55.4. 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 24.1% in 2021 through September 20th and still beat the market by 6.9 percentage points. Hedge funds were also right about betting on SPGI as the stock returned 8.6% since the end of Q2 (through 9/20) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow S&P Global Inc. (NYSE:SPGI)
Follow S&P Global Inc. (NYSE:SPGI)
Suggested Articles:
- 19 Largest Construction Companies In the World
- 10 Best Automotive Stocks to Invest in Now
- 10 Best Income Stocks to Invest In
Disclosure: None. This article was originally published at Insider Monkey.
