Is Cannae Holdings, Inc. (CNNE) Going to Burn These Hedge Funds?

In this article we will take a look at whether hedge funds think Cannae Holdings, Inc. (NYSE:CNNE) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is Cannae Holdings, Inc. (NYSE:CNNE) a buy, sell, or hold? The best stock pickers were in an optimistic mood. The number of bullish hedge fund bets rose by 2 recently. Cannae Holdings, Inc. (NYSE:CNNE) was in 36 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that CNNE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 34 hedge funds in our database with CNNE holdings at the end of December.

In today’s marketplace there are dozens of methods market participants put to use to grade publicly traded companies. Two of the less known methods are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best money managers can outpace the broader indices by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Jeffrey Altman of Owl Creek Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. 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. Now let’s take a glance at the fresh hedge fund action regarding Cannae Holdings, Inc. (NYSE:CNNE).

Do Hedge Funds Think CNNE Is A Good Stock To Buy Now?

At Q1’s end, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in CNNE a year ago. So, let’s check out 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, Seth Rosen’s Nitorum Capital has the biggest position in Cannae Holdings, Inc. (NYSE:CNNE), worth close to $128.3 million, amounting to 6.6% of its total 13F portfolio. Sitting at the No. 2 spot is Michael A. Price and Amos Meron of Empyrean Capital Partners, with a $75.1 million position; 2.2% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include D. E. Shaw’s D E Shaw, Ricky Sandler’s Eminence Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Nitorum Capital allocated the biggest weight to Cannae Holdings, Inc. (NYSE:CNNE), around 6.56% of its 13F portfolio. 11 Capital Partners is also relatively very bullish on the stock, dishing out 6.28 percent of its 13F equity portfolio to CNNE.

Now, some big names have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the largest position in Cannae Holdings, Inc. (NYSE:CNNE). Balyasny Asset Management had $28.1 million invested in the company at the end of the quarter. Jeffrey Altman’s Owl Creek Asset Management also made a $25.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Renaissance Technologies, and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Let’s also examine hedge fund activity in other stocks similar to Cannae Holdings, Inc. (NYSE:CNNE). These stocks are BRF SA (NYSE:BRFS), Cushman & Wakefield plc (NYSE:CWK), Spectrum Brands Holdings, Inc. (NYSE:SPB), Kirby Corporation (NYSE:KEX), BanColombia S.A. (NYSE:CIB), Bank of Hawaii Corporation (NYSE:BOH), and Reata Pharmaceuticals, Inc. (NASDAQ:RETA). This group of stocks’ market values match CNNE’s market value.

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As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $262 million. That figure was $673 million in CNNE’s case. Spectrum Brands Holdings, Inc. (NYSE:SPB) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 3 bullish hedge fund positions. Cannae Holdings, Inc. (NYSE:CNNE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CNNE is 80.6. 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 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately CNNE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CNNE were disappointed as the stock returned -12.4% since the end of March (through 6/25) 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.

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Disclosure: None. This article was originally published at Insider Monkey.