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 The Carlyle Group Inc. (NASDAQ:CG).
Is The Carlyle Group Inc. (NASDAQ:CG) a first-rate investment now? The best stock pickers are getting more bullish. The number of bullish hedge fund positions increased by 3 recently. Our calculations also showed that CG 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). CG was in 16 hedge funds’ portfolios at the end of March. There were 13 hedge funds in our database with CG positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are dozens of tools stock traders employ to analyze publicly traded companies. A pair of the best tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top fund managers can outclass the market by a superb margin (see the details here).
Bill Miller of Miller Value Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the 10 stocks that went up during the 2008 crash to identify the companies that are likely to deliver double digit returns in up and down markets. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to review the latest hedge fund action encompassing The Carlyle Group Inc. (NASDAQ:CG).
What have hedge funds been doing with The Carlyle Group Inc. (NASDAQ:CG)?
Heading into the second quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 23% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in CG over the last 18 quarters. So, let’s examine 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, Alkeon Capital Management, managed by Panayotis Takis Sparaggis, holds the number one position in The Carlyle Group Inc. (NASDAQ:CG). Alkeon Capital Management has a $117.1 million position in the stock, comprising 0.5% of its 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $42.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Tom Gayner’s Markel Gayner Asset Management, Michael Gelband’s ExodusPoint Capital and Bill Miller’s Miller Value Partners. In terms of the portfolio weights assigned to each position Miller Value Partners allocated the biggest weight to The Carlyle Group Inc. (NASDAQ:CG), around 0.54% of its 13F portfolio. Alkeon Capital Management is also relatively very bullish on the stock, designating 0.5 percent of its 13F equity portfolio to CG.
Consequently, key hedge funds have jumped into The Carlyle Group Inc. (NASDAQ:CG) headfirst. Millennium Management, managed by Israel Englander, assembled the largest position in The Carlyle Group Inc. (NASDAQ:CG). Millennium Management had $42.1 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $8.9 million position during the quarter. The other funds with brand new CG positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Donald Sussman’s Paloma Partners, and Noam Gottesman’s GLG Partners.
Let’s now review hedge fund activity in other stocks similar to The Carlyle Group Inc. (NASDAQ:CG). These stocks are Zillow Group Inc (NASDAQ:Z), Clarivate Plc (NYSE:CCC), The Western Union Company (NYSE:WU), and Monolithic Power Systems, Inc. (NASDAQ:MPWR). This group of stocks’ market values resemble CG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| Z | 37 | 1368913 | 0 |
| CCC | 28 | 818151 | -17 |
| WU | 34 | 339513 | 5 |
| MPWR | 23 | 390299 | -4 |
| Average | 30.5 | 729219 | -4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $729 million. That figure was $232 million in CG’s case. Zillow Group Inc (NASDAQ:Z) is the most popular stock in this table. On the other hand Monolithic Power Systems, Inc. (NASDAQ:MPWR) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks The Carlyle Group Inc. (NASDAQ:CG) is even less popular than MPWR. Hedge funds clearly dropped the ball on CG as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on CG as the stock returned 32.5% so far in the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
