The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded CyrusOne Inc (NASDAQ:CONE) based on those filings.
CyrusOne Inc (NASDAQ:CONE) investors should be aware of an increase in hedge fund interest recently. CyrusOne Inc (NASDAQ:CONE) was in 27 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that CONE 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. Now we’re going to analyze the key hedge fund action encompassing CyrusOne Inc (NASDAQ:CONE).
Barry Rosenstein of JANA Partners
Do Hedge Funds Think CONE Is A Good Stock To Buy Now?
At the end of September, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from one quarter earlier. On the other hand, there were a total of 30 hedge funds with a bullish position in CONE a year ago. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, JANA Partners was the largest shareholder of CyrusOne Inc (NASDAQ:CONE), with a stake worth $134.5 million reported as of the end of September. Trailing JANA Partners was Citadel Investment Group, which amassed a stake valued at $120.4 million. Millennium Management, Balyasny Asset Management, and Schonfeld Strategic Advisors 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 JANA Partners allocated the biggest weight to CyrusOne Inc (NASDAQ:CONE), around 10.76% of its 13F portfolio. Strycker View Capital is also relatively very bullish on the stock, dishing out 3.98 percent of its 13F equity portfolio to CONE.
Consequently, key money managers have been driving this bullishness. Pentwater Capital Management, managed by Matthew Halbower, created the most valuable position in CyrusOne Inc (NASDAQ:CONE). Pentwater Capital Management had $17 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $8.9 million investment in the stock during the quarter. The following funds were also among the new CONE investors: David Fiszel’s Honeycomb Asset Management, Usman Waheed’s Strycker View Capital, and Orkun Kilic’s Berry Street Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as CyrusOne Inc (NASDAQ:CONE) but similarly valued. We will take a look at Lithia Motors Inc (NYSE:LAD), Amdocs Limited (NASDAQ:DOX), NiSource Inc. (NYSE:NI), TFI International Inc. (NYSE:TFII), The Middleby Corporation (NASDAQ:MIDD), Altice USA, Inc. (NYSE:ATUS), and CAE, Inc. (NYSE:CAE). This group of stocks’ market valuations are similar to CONE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LAD | 64 | 2823225 | 1 |
| DOX | 24 | 824398 | -5 |
| NI | 24 | 435539 | -12 |
| TFII | 23 | 270343 | 10 |
| MIDD | 29 | 567959 | -6 |
| ATUS | 59 | 1167928 | 15 |
| CAE | 7 | 83687 | -3 |
| Average | 32.9 | 881868 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $882 million. That figure was $496 million in CONE’s case. Lithia Motors Inc (NYSE:LAD) is the most popular stock in this table. On the other hand CAE, Inc. (NYSE:CAE) is the least popular one with only 7 bullish hedge fund positions. CyrusOne Inc (NASDAQ:CONE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CONE is 46.7. 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 gained 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on CONE as the stock returned 15.4% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
