How do we determine whether Chicago Bridge & Iron Company N.V. (NYSE:CBI) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Chicago Bridge & Iron Company N.V. (NYSE:CBI) going to take off soon? The smart money is taking an optimistic view. The number of bullish hedge fund bets moved up by 1 lately. CBI was in 27 hedge funds’ portfolios at the end of the third quarter of 2015. There were 26 hedge funds in our database with CBI holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Trimble Navigation Limited (NASDAQ:TRMB), Genesis Energy, L.P. (NYSE:GEL), and Graphic Packaging Holding Company (NYSE:GPK) to gather more data points.
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According to most stock holders, hedge funds are viewed as slow, old investment vehicles of years past. While there are greater than 8000 funds trading at present, Our experts look at the bigwigs of this club, around 700 funds. Most estimates calculate that this group of people direct bulk of all hedge funds’ total capital, and by keeping an eye on their top picks, Insider Monkey has uncovered a number of investment strategies that have historically outperformed Mr. Market. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, let’s go over the latest action regarding Chicago Bridge & Iron Company N.V. (NYSE:CBI).
What does the smart money think about Chicago Bridge & Iron Company N.V. (NYSE:CBI)?
At the Q3’s end, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Greenlight Capital, managed by David Einhorn, holds the number one position in Chicago Bridge & Iron Company N.V. (NYSE:CBI). Greenlight Capital has an $296.7 million position in the stock, comprising 4.9% of its 13F portfolio. On Greenlight Capital’s heels is Citadel Investment Group, managed by Ken Griffin, which holds an $82.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions contain Warren Buffett’s Berkshire Hathaway, David Tepper’s Appaloosa Management LP and Joel Greenblatt’s Gotham Asset Management.
As aggregate interest increased, some big names were breaking ground themselves. DC Capital Partners, managed by Douglas Dethy, initiated the largest position in Chicago Bridge & Iron Company N.V. (NYSE:CBI). DC Capital Partners had $6.3 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also initiated an $5.4 million position during the quarter. The other funds with brand new CBI positions are Daniel S. Och’s OZ Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and George Hall’s Clinton Group.
Let’s check out hedge fund activity in other stocks similar to Chicago Bridge & Iron Company N.V. (NYSE:CBI). These stocks are Trimble Navigation Limited (NASDAQ:TRMB), Genesis Energy, L.P. (NYSE:GEL), Graphic Packaging Holding Company (NYSE:GPK), and Navient Corp (NASDAQ:NAVI). This group of stocks’ market caps are similar to CBI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRMB | 25 | 274118 | 7 |
| GEL | 7 | 30455 | 0 |
| GPK | 44 | 1203682 | 1 |
| NAVI | 38 | 507042 | 6 |
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $504 million. That figure was $626 million in CBI’s case. Graphic Packaging Holding Company (NYSE:GPK) is the most popular stock in this table, while Genesis Energy, L.P. (NYSE:GEL) is the least popular one with only 7 bullish hedge fund positions. Chicago Bridge & Iron Company N.V. (NYSE:CBI) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GPK might be a better candidate to consider a long position.
