The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about CDW Corporation (NASDAQ:CDW)?
CDW Corporation (NASDAQ:CDW) shareholders have witnessed an increase in enthusiasm from smart money lately. CDW was in 36 hedge funds’ portfolios at the end of March. There were 30 hedge funds in our database with CDW holdings at the end of the previous quarter. Our calculations also showed that CDW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Brown of Hawk Ridge Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s check out the latest hedge fund action encompassing CDW Corporation (NASDAQ:CDW).
What have hedge funds been doing with CDW Corporation (NASDAQ:CDW)?
At the end of the first quarter, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in CDW over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the largest position in CDW Corporation (NASDAQ:CDW), worth close to $549.9 million, accounting for 3.8% of its total 13F portfolio. On Select Equity Group’s heels is AQR Capital Management, led by Cliff Asness, holding a $110.6 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers that are bullish consist of Bo Shan’s Gobi Capital, Noam Gottesman’s GLG Partners and Peter Lewis’s LFL Advisers. In terms of the portfolio weights assigned to each position LFL Advisers allocated the biggest weight to CDW Corporation (NASDAQ:CDW), around 24.22% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, designating 10.11 percent of its 13F equity portfolio to CDW.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in CDW Corporation (NASDAQ:CDW). Citadel Investment Group had $14 million invested in the company at the end of the quarter. Mikal Patel’s Oribel Capital Management also initiated a $6.8 million position during the quarter. The other funds with new positions in the stock are David Brown’s Hawk Ridge Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CDW Corporation (NASDAQ:CDW) but similarly valued. We will take a look at Deutsche Bank Aktiengesellschaft (NYSE:DB), BioNTech SE (NASDAQ:BNTX), Maxim Integrated Products Inc. (NASDAQ:MXIM), and CGI Inc. (NYSE:GIB). This group of stocks’ market valuations resemble CDW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DB | 12 | 916383 | 0 |
| BNTX | 6 | 37923 | 2 |
| MXIM | 30 | 213575 | -2 |
| GIB | 18 | 246597 | -1 |
| Average | 16.5 | 353620 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $354 million. That figure was $947 million in CDW’s case. Maxim Integrated Products Inc. (NASDAQ:MXIM) is the most popular stock in this table. On the other hand BioNTech SE (NASDAQ:BNTX) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks CDW Corporation (NASDAQ:CDW) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on CDW, though not to the same extent, as the stock returned 19.3% in Q2 (through the end of May) and outperformed the market as well.
Follow Cdw Corp (Old Filings) (NASDAQ:CDW)
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Disclosure: None. This article was originally published at Insider Monkey.
