Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of CDW Corporation (NASDAQ:CDW) based on that data.
Is CDW stock a buy or sell? CDW Corporation (NASDAQ:CDW) was in 43 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 40. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. CDW shareholders have witnessed an increase in hedge fund sentiment recently. There were 30 hedge funds in our database with CDW positions at the end of the third quarter. Our calculations also showed that CDW isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
Robert Pohly of Samlyn Capital
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Do Hedge Funds Think CDW Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in CDW a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in CDW Corporation (NASDAQ:CDW) was held by Select Equity Group, which reported holding $983.2 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $90.3 million position. Other investors bullish on the company included Gobi Capital, AQR Capital Management, and Samlyn Capital. In terms of the portfolio weights assigned to each position LFL Advisers allocated the biggest weight to CDW Corporation (NASDAQ:CDW), around 18.95% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, designating 8.77 percent of its 13F equity portfolio to CDW.
With a general bullishness amongst the heavyweights, key money managers have jumped into CDW Corporation (NASDAQ:CDW) headfirst. Woodline Partners, managed by Michael Rockefeller and Karl Kroeker, created the most outsized position in CDW Corporation (NASDAQ:CDW). Woodline Partners had $10.5 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $9.5 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Jinghua Yan’s TwinBeech Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as CDW Corporation (NASDAQ:CDW) but similarly valued. These stocks are ZoomInfo Technologies Inc. (NASDAQ:ZI), Wheaton Precious Metals Corp. (NYSE:WPM), Expedia Group Inc (NASDAQ:EXPE), Pioneer Natural Resources Company (NYSE:PXD), Hologic, Inc. (NASDAQ:HOLX), PagSeguro Digital Ltd. (NYSE:PAGS), and Check Point Software Technologies Ltd. (NASDAQ:CHKP). This group of stocks’ market values are similar to CDW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZI | 31 | 327082 | 9 |
| WPM | 34 | 755047 | 5 |
| EXPE | 76 | 6594558 | 12 |
| PXD | 40 | 685798 | -2 |
| HOLX | 43 | 715967 | -7 |
| PAGS | 25 | 1840597 | 1 |
| CHKP | 26 | 775145 | -1 |
| Average | 39.3 | 1670599 | 2.4 |
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As you can see these stocks had an average of 39.3 hedge funds with bullish positions and the average amount invested in these stocks was $1671 million. That figure was $1623 million in CDW’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand PagSeguro Digital Ltd. (NYSE:PAGS) is the least popular one with only 25 bullish hedge fund positions. CDW Corporation (NASDAQ:CDW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CDW is 57.6. 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. 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 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on CDW as the stock returned 20.2% since the end of Q4 (through 3/19) 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.
