Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
CNO Financial Group Inc (NYSE:CNO) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. There were 8 hedge funds in our database with CNO holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Piedmont Office Realty Trust, Inc. (NYSE:PDM), Sibanye Gold Ltd (ADR) (NYSE:SBGL), and Silgan Holdings Inc. (NASDAQ:SLGN) to gather more data points.
Follow Cno Financial Group Inc. (NYSE:CNO)
Follow Cno Financial Group Inc. (NYSE:CNO)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading CNO Financial Group Inc (NYSE:CNO)?
Heading into the fourth quarter of 2016, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a rise of 125% from the second quarter of 2016. On the other hand, there were a total of 8 hedge funds with a bullish position in CNO at the beginning of this year. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Joe Huber’s Huber Capital Management has the biggest position in CNO Financial Group Inc (NYSE:CNO), worth close to $129.8 million, accounting for 5.1% of its total 13F portfolio. The second largest stake is held by Ken Griffin’s Citadel Investment Group, which holds a $21.3 million position. Remaining hedge funds and institutional investors that are bullish include Cliff Asness’ AQR Capital Management, Israel Englander’s Millennium Management and David Costen Haley’s HBK Investments. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, specific money managers have jumped into CNO Financial Group Inc (NYSE:CNO) headfirst. D. E. Shaw’s D E Shaw, created the most valuable position in CNO Financial Group Inc (NYSE:CNO). D E Shaw had $4.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $3.5 million position during the quarter. The other funds with brand new CNO positions are John Overdeck and David Siegel’s Two Sigma Advisors, Dmitry Balyasny’s Balyasny Asset Management, and John Fichthorn’s Dialectic Capital Management.
Let’s check out hedge fund activity in other stocks similar to CNO Financial Group Inc (NYSE:CNO). These stocks are Piedmont Office Realty Trust, Inc. (NYSE:PDM), Sibanye Gold Ltd (ADR) (NYSE:SBGL), Silgan Holdings Inc. (NASDAQ:SLGN), and Webster Financial Corporation (NYSE:WBS). This group of stocks’ market valuations resemble CNO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PDM | 10 | 211041 | 0 |
| SBGL | 8 | 20736 | -4 |
| SLGN | 9 | 146710 | -2 |
| WBS | 13 | 223939 | -2 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $151 million. That figure was $206 million in CNO’s case. Webster Financial Corporation (NYSE:WBS) is the most popular stock in this table. On the other hand Sibanye Gold Ltd (ADR) (NYSE:SBGL) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks CNO Financial Group Inc (NYSE:CNO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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