Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Chubb Limited (NYSE:CB) changed recently.
Chubb Limited (NYSE:CB) has experienced a decrease in hedge fund sentiment lately. Chubb Limited (NYSE:CB) was in 30 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 50. Our calculations also showed that CB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Now let’s take a glance at the new hedge fund action regarding Chubb Limited (NYSE:CB).
Ole Andreas Halvorsen of Viking Global
Do Hedge Funds Think CB Is A Good Stock To Buy Now?
At third quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from the previous quarter. On the other hand, there were a total of 45 hedge funds with a bullish position in CB a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Viking Global was the largest shareholder of Chubb Limited (NYSE:CB), with a stake worth $527.4 million reported as of the end of September. Trailing Viking Global was Polar Capital, which amassed a stake valued at $194.2 million. Arrowstreet Capital, AQR Capital Management, and Adage Capital Management 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 Polaris Capital Management allocated the biggest weight to Chubb Limited (NYSE:CB), around 1.71% of its 13F portfolio. Prana Capital Management is also relatively very bullish on the stock, earmarking 1.67 percent of its 13F equity portfolio to CB.
Judging by the fact that Chubb Limited (NYSE:CB) has faced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds who were dropping their full holdings in the third quarter. Interestingly, D. E. Shaw’s D E Shaw dumped the largest position of the 750 funds monitored by Insider Monkey, valued at about $76.1 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also dropped its stock, about $30.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 12 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Chubb Limited (NYSE:CB). We will take a look at The Bank of Nova Scotia (NYSE:BNS), The Sherwin-Williams Company (NYSE:SHW), Capital One Financial Corp. (NYSE:COF), Fiserv, Inc. (NASDAQ:FISV), Equinix Inc (NASDAQ:EQIX), Becton, Dickinson and Company (NYSE:BDX), and Edwards Lifesciences Corporation (NYSE:EW). This group of stocks’ market caps resemble CB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BNS | 17 | 193321 | 3 |
| SHW | 44 | 1576816 | -5 |
| COF | 55 | 4708790 | -9 |
| FISV | 65 | 3945223 | -7 |
| EQIX | 31 | 1195457 | -2 |
| BDX | 51 | 2339968 | -1 |
| EW | 43 | 2169239 | -4 |
| Average | 43.7 | 2304116 | -3.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.7 hedge funds with bullish positions and the average amount invested in these stocks was $2304 million. That figure was $1273 million in CB’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 17 bullish hedge fund positions. Chubb Limited (NYSE:CB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CB is 24.5. 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 negative signal and 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately CB wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CB investors were disappointed as the stock returned 3.5% since the end of September (through 11/30) 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 most of these stocks already outperformed the market in 2021.
Follow Chubb Corp (Old Insider Filings) (NYSE:CB)
Follow Chubb Corp (Old Insider Filings) (NYSE:CB)
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Disclosure: None. This article was originally published at Insider Monkey.
