Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Intercontinental Exchange Inc (NYSE:ICE).
Is Intercontinental Exchange Inc (NYSE:ICE) a buy, sell, or hold? Investors who are in the know were in an optimistic mood. The number of long hedge fund positions went up by 1 in recent months. Intercontinental Exchange Inc (NYSE:ICE) was in 48 hedge funds’ portfolios at the end of September. The all time high for this statistic is 64. Our calculations also showed that ICE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 47 hedge funds in our database with ICE holdings at the end of June.
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. With all of this in mind we’re going to take a gander at the recent hedge fund action surrounding Intercontinental Exchange Inc (NYSE:ICE).
William Von Mueffling of Cantillon Capital Management
Do Hedge Funds Think ICE Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. By comparison, 64 hedge funds held shares or bullish call options in ICE a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically, Cantillon Capital Management was the largest shareholder of Intercontinental Exchange Inc (NYSE:ICE), with a stake worth $474.7 million reported as of the end of September. Trailing Cantillon Capital Management was Alkeon Capital Management, which amassed a stake valued at $384.5 million. Ako Capital, Arrowstreet Capital, and D E Shaw 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 Intercontinental Exchange Inc (NYSE:ICE), around 29.61% of its 13F portfolio. Crescent Park Management is also relatively very bullish on the stock, designating 5.5 percent of its 13F equity portfolio to ICE.
Now, some big names were breaking ground themselves. Junto Capital Management, managed by James Parsons, assembled the most valuable position in Intercontinental Exchange Inc (NYSE:ICE). Junto Capital Management had $140.4 million invested in the company at the end of the quarter. Qing Li’s Sciencast Management also made a $2.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Gregg Moskowitz’s Interval Partners, Gregg Moskowitz’s Interval Partners, and Ran Pang’s Quantamental Technologies.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Intercontinental Exchange Inc (NYSE:ICE) but similarly valued. We will take a look at Bank of Montreal (NYSE:BMO), Aon plc (NYSE:AON), Colgate-Palmolive Company (NYSE:CL), Illumina, Inc. (NASDAQ:ILMN), Waste Management, Inc. (NYSE:WM), Autodesk, Inc. (NASDAQ:ADSK), and Banco Santander, S.A. (NYSE:SAN). This group of stocks’ market values are similar to ICE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BMO | 12 | 142342 | 0 |
| AON | 47 | 6005008 | -21 |
| CL | 54 | 2577652 | -4 |
| ILMN | 55 | 2801228 | 4 |
| WM | 36 | 3629155 | -3 |
| ADSK | 54 | 2356939 | -10 |
| SAN | 14 | 543799 | -3 |
| Average | 38.9 | 2579446 | -5.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.9 hedge funds with bullish positions and the average amount invested in these stocks was $2579 million. That figure was $2832 million in ICE’s case. Illumina, Inc. (NASDAQ:ILMN) is the most popular stock in this table. On the other hand Bank of Montreal (NYSE:BMO) is the least popular one with only 12 bullish hedge fund positions. Intercontinental Exchange Inc (NYSE:ICE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ICE is 70.4. 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. 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 still beat the market by 5.6 percentage points. Hedge funds were also right about betting on ICE as the stock returned 13.8% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Intercontinentalexchange Inc (NYSE:ICE)
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Disclosure: None. This article was originally published at Insider Monkey.
