After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of December 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards CBRE Group, Inc. (NYSE:CBRE).
Is CBRE stock a buy? Investors who are in the know were turning bullish. The number of bullish hedge fund positions rose by 7 lately. CBRE Group, Inc. (NYSE:CBRE) was in 31 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 34. Our calculations also showed that CBRE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Now we’re going to go over the new hedge fund action surrounding CBRE Group, Inc. (NYSE:CBRE).
Do Hedge Funds Think CBRE Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in CBRE over the last 22 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in CBRE Group, Inc. (NYSE:CBRE) was held by ValueAct Capital, which reported holding $641.6 million worth of stock at the end of December. It was followed by Generation Investment Management with a $619.3 million position. Other investors bullish on the company included Cantillon Capital Management, Arrowstreet Capital, and Hosking Partners. In terms of the portfolio weights assigned to each position ValueAct Capital allocated the biggest weight to CBRE Group, Inc. (NYSE:CBRE), around 7.44% of its 13F portfolio. Cantillon Capital Management is also relatively very bullish on the stock, designating 3.14 percent of its 13F equity portfolio to CBRE.
Consequently, some big names have jumped into CBRE Group, Inc. (NYSE:CBRE) headfirst. Paloma Partners, managed by Donald Sussman, initiated the most valuable position in CBRE Group, Inc. (NYSE:CBRE). Paloma Partners had $3.8 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $3.8 million position during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Mika Toikka’s AlphaCrest Capital Management, and Greg Eisner’s Engineers Gate Manager.
Let’s go over hedge fund activity in other stocks similar to CBRE Group, Inc. (NYSE:CBRE). These stocks are West Pharmaceutical Services Inc. (NYSE:WST), United Microelectronics Corp (NYSE:UMC), Zebra Technologies Corporation (NASDAQ:ZBRA), CGI Inc. (NYSE:GIB), Canon Inc. (NYSE:CAJ), Synchrony Financial (NYSE:SYF), and SVB Financial Group (NASDAQ:SIVB). This group of stocks’ market caps match CBRE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WST | 34 | 455821 | -7 |
| UMC | 12 | 190662 | 1 |
| ZBRA | 41 | 910955 | -3 |
| GIB | 15 | 128389 | -5 |
| CAJ | 7 | 58073 | 0 |
| SYF | 50 | 2464559 | 4 |
| SIVB | 31 | 707703 | 4 |
| Average | 27.1 | 702309 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $702 million. That figure was $2119 million in CBRE’s case. Synchrony Financial (NYSE:SYF) is the most popular stock in this table. On the other hand Canon Inc. (NYSE:CAJ) is the least popular one with only 7 bullish hedge fund positions. CBRE Group, Inc. (NYSE:CBRE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CBRE is 65.3. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on CBRE as the stock returned 29.1% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
