In this article we will check out the progression of hedge fund sentiment towards CBOE Global Markets Inc (NASDAQ:CBOE) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
CBOE Global Markets Inc (NASDAQ:CBOE) investors should be aware of an increase in enthusiasm from smart money recently. CBOE Global Markets Inc (NASDAQ:CBOE) was in 35 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that CBOE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind we’re going to take a peek at the fresh hedge fund action regarding CBOE Global Markets Inc (NASDAQ:CBOE).
Do Hedge Funds Think CBOE Is A Good Stock To Buy Now?
At Q3’s end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter of 2021. On the other hand, there were a total of 33 hedge funds with a bullish position in CBOE 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.
More specifically, Renaissance Technologies was the largest shareholder of CBOE Global Markets Inc (NASDAQ:CBOE), with a stake worth $304 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $111.7 million. Balyasny Asset Management, Schonfeld Strategic Advisors, and Citadel Investment Group 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 Truvvo Partners allocated the biggest weight to CBOE Global Markets Inc (NASDAQ:CBOE), around 12.96% of its 13F portfolio. Full18 Capital is also relatively very bullish on the stock, dishing out 2.61 percent of its 13F equity portfolio to CBOE.
Consequently, key money managers have jumped into CBOE Global Markets Inc (NASDAQ:CBOE) headfirst. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, created the biggest position in CBOE Global Markets Inc (NASDAQ:CBOE). Senator Investment Group had $37.2 million invested in the company at the end of the quarter. Peter Seuss’s Prana Capital Management also made a $10.6 million investment in the stock during the quarter. The following funds were also among the new CBOE investors: Allon Hellmann’s Full18 Capital, Ravi Chopra’s Azora Capital, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s go over hedge fund activity in other stocks similar to CBOE Global Markets Inc (NASDAQ:CBOE). These stocks are Williams-Sonoma, Inc. (NYSE:WSM), Advance Auto Parts, Inc. (NYSE:AAP), Packaging Corporation Of America (NYSE:PKG), Telefonica Brasil SA (NYSE:VIV), The J.M. Smucker Company (NYSE:SJM), W.R. Berkley Corporation (NYSE:WRB), and Fidelity National Financial Inc (NYSE:FNF). This group of stocks’ market valuations match CBOE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WSM | 31 | 730615 | -3 |
| AAP | 35 | 899336 | 1 |
| PKG | 26 | 281022 | -5 |
| VIV | 5 | 42334 | -4 |
| SJM | 25 | 506030 | -9 |
| WRB | 26 | 593633 | -10 |
| FNF | 32 | 1390536 | -2 |
| Average | 25.7 | 634787 | -4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $635 million. That figure was $971 million in CBOE’s case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand Telefonica Brasil SA (NYSE:VIV) is the least popular one with only 5 bullish hedge fund positions. CBOE Global Markets Inc (NASDAQ:CBOE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CBOE is 86.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately CBOE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CBOE were disappointed as the stock returned 4.1% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Cboe Global Markets Inc. (NASDAQ:CBOE)
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Disclosure: None. This article was originally published at Insider Monkey.
