Hedge Funds Have Never Been This Bullish On CBRE Group, Inc. (CBRE)

In this article you are going to find out whether hedge funds think CBRE Group, Inc. (NYSE:CBRE) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

CBRE Group, Inc. (NYSE:CBRE) was in 37 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 34. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. CBRE has experienced an increase in activity from the world’s largest hedge funds of late. There were 30 hedge funds in our database with CBRE holdings at the end of March. Our calculations also showed that CBRE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

To the average investor there are plenty of indicators market participants can use to analyze their stock investments. A couple of the most innovative indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace their index-focused peers by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

John Rogers of Ariel Investments

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech 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. Keeping this in mind we’re going to review the key hedge fund action encompassing CBRE Group, Inc. (NYSE:CBRE).

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

At second quarter’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from the previous quarter. On the other hand, there were a total of 29 hedge funds with a bullish position in CBRE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, ValueAct Capital held the most valuable stake in CBRE Group, Inc. (NYSE:CBRE), which was worth $877.2 million at the end of the second quarter. On the second spot was Generation Investment Management which amassed $592.9 million worth of shares. Cantillon Capital Management, Arrowstreet Capital, and Ariel Investments 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 ValueAct Capital allocated the biggest weight to CBRE Group, Inc. (NYSE:CBRE), around 10.49% of its 13F portfolio. Hosking Partners is also relatively very bullish on the stock, setting aside 3.04 percent of its 13F equity portfolio to CBRE.

Consequently, key hedge funds were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most valuable position in CBRE Group, Inc. (NYSE:CBRE). Marshall Wace LLP had $17.7 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also made a $15.4 million investment in the stock during the quarter. The following funds were also among the new CBRE investors: Joe DiMenna’s ZWEIG DIMENNA PARTNERS, Dmitry Balyasny’s Balyasny Asset Management, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now review hedge fund activity in other stocks similar to CBRE Group, Inc. (NYSE:CBRE). We will take a look at Energy Transfer L.P. (NYSE:ET), Nucor Corporation (NYSE:NUE), Seagen Inc. (NASDAQ:SGEN), The Kroger Co. (NYSE:KR), State Street Corporation (NYSE:STT), Keysight Technologies Inc (NYSE:KEYS), and AMC Entertainment Holdings Inc (NYSE:AMC). This group of stocks’ market values resemble CBRE’s market value.

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As you can see these stocks had an average of 32.4 hedge funds with bullish positions and the average amount invested in these stocks was $2197 million. That figure was $2649 million in CBRE’s case. The Kroger Co. (NYSE:KR) is the most popular stock in this table. On the other hand AMC Entertainment Holdings Inc (NYSE:AMC) is the least popular one with only 21 bullish hedge fund positions. CBRE Group, Inc. (NYSE:CBRE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CBRE is 84.4. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on CBRE as the stock returned 14% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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