Hedge Funds Are Crazy About CME Group Inc (CME)

With the third-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 fourth quarter of 2021. One of these stocks was CME Group Inc (NASDAQ:CME).

CME Group Inc (NASDAQ:CME) has experienced an increase in enthusiasm from smart money of late. CME Group Inc (NASDAQ:CME) was in 64 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 62. This means the bullish number of hedge fund positions in this stock currently sits at its new all time high. Our calculations also showed that CME 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. Keeping this in mind let’s take a look at the fresh hedge fund action surrounding CME Group Inc (NASDAQ:CME).

David Siegel of Two Sigma Advisors

Do Hedge Funds Think CME Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 64 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CME over the last 25 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, GuardCap Asset Management, managed by Guardian Capital, holds the most valuable position in CME Group Inc (NASDAQ:CME). GuardCap Asset Management has a $778.5 million position in the stock, comprising 10.7% of its 13F portfolio. The second largest stake is held by Cantillon Capital Management, led by William von Mueffling, holding a $330.8 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise Barry Dargan’s Intermede Investment Partners, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Robert M. P. Luciano’s VGI Partners. In terms of the portfolio weights assigned to each position VGI Partners allocated the biggest weight to CME Group Inc (NASDAQ:CME), around 12.72% of its 13F portfolio. GuardCap Asset Management is also relatively very bullish on the stock, setting aside 10.72 percent of its 13F equity portfolio to CME.

Consequently, some big names have been driving this bullishness. Renaissance Technologies, assembled the biggest position in CME Group Inc (NASDAQ:CME). Renaissance Technologies had $55 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $43.3 million investment in the stock during the quarter. The other funds with brand new CME positions are Ryan Caldwell’s Chiron Investment Management, Peter Seuss’s Prana Capital Management, and Clint Carlson’s Carlson Capital.

Let’s now take a look at hedge fund activity in other stocks similar to CME Group Inc (NASDAQ:CME). These stocks are Cigna Corporation (NYSE:CI), Westpac Banking Corporation (NYSE:WBK), Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR), CSX Corporation (NASDAQ:CSX), ABB Ltd (NYSE:ABB), BioNTech SE (NASDAQ:BNTX), and Moody’s Corporation (NYSE:MCO). This group of stocks’ market caps are similar to CME’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.4 hedge funds with bullish positions and the average amount invested in these stocks was $3767 million. That figure was $2686 million in CME’s case. Cigna Corporation (NYSE:CI) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks CME Group Inc (NASDAQ:CME) is more popular among hedge funds. Our overall hedge fund sentiment score for CME is 87. 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 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on CME as the stock returned 14% since the end of September (through 11/30) 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.

Suggested Articles:

• 10 Best AI Stocks under $50
• 25 Most Climate-Resilient Cities in the US
• 15 Largest Global IPOs of All Time

Disclosure: None. This article was originally published at Insider Monkey.