Hedge Funds Have Never Been This Bullish On IHS Markit Ltd. (INFO)

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 IHS Markit Ltd. (NYSE:INFO).

IHS Markit Ltd. (NYSE:INFO) has seen an increase in hedge fund sentiment in recent months. IHS Markit Ltd. (NYSE:INFO) was in 61 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 59. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 54 hedge funds in our database with INFO holdings at the end of March. Our calculations also showed that INFO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Jeffrey Talpins of Element Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium 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. With all of this in mind we’re going to review the recent hedge fund action encompassing IHS Markit Ltd. (NYSE:INFO).

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

Heading into the third quarter of 2021, a total of 61 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the first quarter of 2020. By comparison, 44 hedge funds held shares or bullish call options in INFO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in IHS Markit Ltd. (NYSE:INFO) was held by Pentwater Capital Management, which reported holding $799.9 million worth of stock at the end of June. It was followed by Millennium Management with a $508.7 million position. Other investors bullish on the company included D E Shaw, Citadel Investment Group, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Sand Grove Capital Partners allocated the biggest weight to IHS Markit Ltd. (NYSE:INFO), around 18.41% of its 13F portfolio. Berry Street Capital is also relatively very bullish on the stock, designating 9.92 percent of its 13F equity portfolio to INFO.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Soros Fund Management, managed by George Soros, created the most valuable position in IHS Markit Ltd. (NYSE:INFO). Soros Fund Management had $152.1 million invested in the company at the end of the quarter. Simon Sadler’s Segantii Capital also initiated a $103.9 million position during the quarter. The following funds were also among the new INFO investors: Michel Massoud’s Melqart Asset Management, Frank Fu’s CaaS Capital, and Jeffrey Talpins’s Element Capital Management.

Let’s go over hedge fund activity in other stocks similar to IHS Markit Ltd. (NYSE:INFO). We will take a look at Agilent Technologies Inc. (NYSE:A), The Bank of New York Mellon Corporation (NYSE:BK), Schlumberger Limited. (NYSE:SLB), TE Connectivity Ltd. (NYSE:TEL), BCE Inc. (NYSE:BCE), Match Group, Inc. (NASDAQ:MTCH), and Marriott International Inc (NASDAQ:MAR). All of these stocks’ market caps are closest to INFO’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 42.4 hedge funds with bullish positions and the average amount invested in these stocks was $2562 million. That figure was $5948 million in INFO’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 14 bullish hedge fund positions. IHS Markit Ltd. (NYSE:INFO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INFO is 88. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on INFO as the stock returned 9.1% since the end of Q2 (through 9/27) 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.