Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Cemex SAB de CV (NYSE:CX).
Is Cemex SAB de CV (NYSE:CX) an excellent investment now? The best stock pickers were in a bullish mood. The number of long hedge fund bets moved up by 2 in recent months. Cemex SAB de CV (NYSE:CX) was in 24 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 22 hedge funds in our database with CX holdings at the end of December.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Howard Marks of Oaktree Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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 take a glance at the latest hedge fund action surrounding Cemex SAB de CV (NYSE:CX).
Do Hedge Funds Think CX Is A Good Stock To Buy Now?
At Q1’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in CX a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Howard Marks’s Oaktree Capital Management has the most valuable position in Cemex SAB de CV (NYSE:CX), worth close to $103.6 million, amounting to 1.6% of its total 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $72 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish contain Jos Shaver’s Electron Capital Partners, Jeremy Hosking’s Hosking Partners and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Prince Street Capital Management allocated the biggest weight to Cemex SAB de CV (NYSE:CX), around 5.29% of its 13F portfolio. Electron Capital Partners is also relatively very bullish on the stock, designating 4.48 percent of its 13F equity portfolio to CX.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Cemex SAB de CV (NYSE:CX) headfirst. Prince Street Capital Management, managed by David Halpert, created the most outsized position in Cemex SAB de CV (NYSE:CX). Prince Street Capital Management had $7.4 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $2.8 million investment in the stock during the quarter. The other funds with brand new CX positions are Steve Cohen’s Point72 Asset Management, Warren Lammert’s Granite Point Capital, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s also examine hedge fund activity in other stocks similar to Cemex SAB de CV (NYSE:CX). We will take a look at Five9 Inc (NASDAQ:FIVN), Lithia Motors Inc (NYSE:LAD), East West Bancorp, Inc. (NASDAQ:EWBC), Bright Horizons Family Solutions Inc (NYSE:BFAM), ICON Public Limited Company (NASDAQ:ICLR), Pentair plc (NYSE:PNR), and Molson Coors Beverage Company (NYSE:TAP). This group of stocks’ market valuations resemble CX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FIVN | 45 | 1641865 | -2 |
| LAD | 40 | 2316536 | 1 |
| EWBC | 25 | 467070 | 1 |
| BFAM | 18 | 78337 | -2 |
| ICLR | 29 | 731050 | 0 |
| PNR | 30 | 775268 | 1 |
| TAP | 34 | 341099 | -5 |
| Average | 31.6 | 907318 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.6 hedge funds with bullish positions and the average amount invested in these stocks was $907 million. That figure was $471 million in CX’s case. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table. On the other hand Bright Horizons Family Solutions Inc (NYSE:BFAM) is the least popular one with only 18 bullish hedge fund positions. Cemex SAB de CV (NYSE:CX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CX is 48.1. 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 23.8% in 2021 through July 16th and beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on CX, though not to the same extent, as the stock returned 12.9% since the end of Q1 (through July 16th) and outperformed the market.
Follow Cemex S A B De C V (NYSE:CX)
Follow Cemex S A B De C V (NYSE:CX)
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Disclosure: None. This article was originally published at Insider Monkey.
