The fourth quarter was a rough one for most investors, as fears of a rising interest rate environment in the U.S, a trade war with China, and a more or less stagnant Europe, weighed heavily on the minds of investors. Both the S&P 500 and Russell 2000 sank as a result, with the Russell 2000, which is composed of smaller companies, being hit especially hard. This was primarily due to hedge funds, which are big supporters of small-cap stocks, pulling some of their capital out of the volatile markets during this time. Let’s look at how this market volatility affected the sentiment of hedge funds towards CoStar Group Inc (NASDAQ:CSGP), and what that likely means for the prospects of the company and its stock.
Is CoStar Group Inc (NASDAQ:CSGP) going to take off soon? Prominent investors are getting more bullish. The number of bullish hedge fund positions improved by 3 lately. Our calculations also showed that csgp isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most market participants, hedge funds are viewed as unimportant, outdated financial vehicles of the past. While there are greater than 8,000 funds with their doors open at present, Our researchers look at the leaders of this club, around 700 funds. Most estimates calculate that this group of people manage bulk of the hedge fund industry’s total capital, and by tracking their finest stock picks, Insider Monkey has formulated several investment strategies that have historically surpassed the market. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by 6 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Let’s check out the key hedge fund action surrounding CoStar Group Inc (NASDAQ:CSGP).
How have hedgies been trading CoStar Group Inc (NASDAQ:CSGP)?
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from one quarter earlier. By comparison, 29 hedge funds held shares or bullish call options in CSGP heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Brian Bares’s Bares Capital Management has the biggest position in CoStar Group Inc (NASDAQ:CSGP), worth close to $237.6 million, amounting to 6.7% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which holds a $102.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish include Robert Joseph Caruso’s Select Equity Group, Jim Simons’s Renaissance Technologies and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Now, specific money managers have jumped into CoStar Group Inc (NASDAQ:CSGP) headfirst. Stevens Capital Management, managed by Matthew Tewksbury, created the most valuable position in CoStar Group Inc (NASDAQ:CSGP). Stevens Capital Management had $8.2 million invested in the company at the end of the quarter. Peter Seuss’s Prana Capital Management also initiated a $4.6 million position during the quarter. The other funds with brand new CSGP positions are Joel Greenblatt’s Gotham Asset Management, Paul Tudor Jones’s Tudor Investment Corp, and Frederick DiSanto’s Ancora Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CoStar Group Inc (NASDAQ:CSGP) but similarly valued. We will take a look at Liberty Broadband Corp (NASDAQ:LBRDA), Liberty Broadband Corp (NASDAQ:LBRDK), Omnicom Group Inc. (NYSE:OMC), and Ball Corporation (NYSE:BLL). This group of stocks’ market values match CSGP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LBRDA | 22 | 607395 | -3 |
| LBRDK | 37 | 3457184 | 3 |
| OMC | 19 | 725400 | 6 |
| BLL | 20 | 466727 | 0 |
| Average | 24.5 | 1314177 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.31 billion. That figure was $885 million in CSGP’s case. Liberty Broadband Corp (NASDAQ:LBRDK) is the most popular stock in this table. On the other hand Omnicom Group Inc. (NYSE:OMC) is the least popular one with only 19 bullish hedge fund positions. CoStar Group Inc (NASDAQ:CSGP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LBRDK might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
