The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Chubb Limited (NYSE:CB) based on those filings.
Chubb Limited (NYSE:CB) investors should be aware of an increase in enthusiasm from smart money of late. Chubb Limited (NYSE:CB) was in 41 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 50. There were 34 hedge funds in our database with CB positions at the end of the fourth quarter. Our calculations also showed that CB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ole Andreas Halvorsen of Viking Global
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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 let’s view the fresh hedge fund action encompassing Chubb Limited (NYSE:CB).
Do Hedge Funds Think CB Is A Good Stock To Buy Now?
At the end of March, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the fourth quarter of 2020. On the other hand, there were a total of 33 hedge funds with a bullish position in CB a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Chubb Limited (NYSE:CB) was held by Viking Global, which reported holding $660.6 million worth of stock at the end of December. It was followed by Polar Capital with a $182.2 million position. Other investors bullish on the company included Adage Capital Management, Schonfeld Strategic Advisors, and Millennium Management. In terms of the portfolio weights assigned to each position Prana Capital Management allocated the biggest weight to Chubb Limited (NYSE:CB), around 3.93% of its 13F portfolio. Quantamental Technologies is also relatively very bullish on the stock, setting aside 2.66 percent of its 13F equity portfolio to CB.
As aggregate interest increased, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the biggest position in Chubb Limited (NYSE:CB). Arrowstreet Capital had $38.3 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also made a $31.1 million investment in the stock during the quarter. The other funds with brand new CB positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Benjamin A. Smith’s Laurion Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Chubb Limited (NYSE:CB) but similarly valued. These stocks are Becton, Dickinson and Company (NYSE:BDX), Illinois Tool Works Inc. (NYSE:ITW), Norfolk Southern Corp. (NYSE:NSC), KE Holdings Inc (NYSE:BEKE), Dell Technologies Inc. (NYSE:DELL), Brookfield Asset Management Inc. (NYSE:BAM), and Westpac Banking Corporation (NYSE:WBK). This group of stocks’ market caps match CB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BDX | 65 | 3732947 | 0 |
| ITW | 33 | 411615 | -7 |
| NSC | 46 | 898621 | 2 |
| BEKE | 33 | 2308833 | 3 |
| DELL | 54 | 4834607 | 4 |
| BAM | 34 | 1388352 | -4 |
| WBK | 3 | 35365 | 0 |
| Average | 38.3 | 1944334 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.3 hedge funds with bullish positions and the average amount invested in these stocks was $1944 million. That figure was $1605 million in CB’s case. Becton, Dickinson and Company (NYSE:BDX) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 3 bullish hedge fund positions. Chubb Limited (NYSE:CB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CB is 65.2. 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately CB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CB were disappointed as the stock returned -0.8% since the end of March (through 6/18) 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 Chubb Corp (Old Insider Filings) (NYSE:CB)
Follow Chubb Corp (Old Insider Filings) (NYSE:CB)
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Disclosure: None. This article was originally published at Insider Monkey.
