At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31. In this article, we will use that wealth of knowledge to determine whether or not Cna Financial Corporation (NYSE:CNA) makes for a good investment right now.
Is Cna Financial Corporation (NYSE:CNA) a splendid investment now? Money managers are buying. The number of bullish hedge fund positions went up by 1 in recent months. Our calculations also showed that CNA isn’t among the 30 most popular stocks among hedge funds. CNA was in 14 hedge funds’ portfolios at the end of the first quarter of 2019. There were 13 hedge funds in our database with CNA positions at the end of the previous quarter.
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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to review the key hedge fund action surrounding Cna Financial Corporation (NYSE:CNA).
How have hedgies been trading Cna Financial Corporation (NYSE:CNA)?
At Q1’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the fourth quarter of 2018. On the other hand, there were a total of 14 hedge funds with a bullish position in CNA 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.
Among these funds, Renaissance Technologies held the most valuable stake in Cna Financial Corporation (NYSE:CNA), which was worth $36 million at the end of the first quarter. On the second spot was Millennium Management which amassed $9.9 million worth of shares. Moreover, GLG Partners, Citadel Investment Group, and AQR Capital Management were also bullish on Cna Financial Corporation (NYSE:CNA), allocating a large percentage of their portfolios to this stock.
Now, specific money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Cna Financial Corporation (NYSE:CNA). Arrowstreet Capital had $3.7 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $0.5 million investment in the stock during the quarter. The other funds with brand new CNA positions are Bruce Kovner’s Caxton Associates LP and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Cna Financial Corporation (NYSE:CNA) but similarly valued. These stocks are Seattle Genetics, Inc. (NASDAQ:SGEN), Elanco Animal Health Incorporated (NYSE:ELAN), Old Dominion Freight Line, Inc. (NASDAQ:ODFL), and Kansas City Southern (NYSE:KSU). This group of stocks’ market valuations match CNA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SGEN | 19 | 4016031 | 3 |
| ELAN | 33 | 1055959 | 15 |
| ODFL | 26 | 220250 | 6 |
| KSU | 26 | 560883 | 6 |
| Average | 26 | 1463281 | 7.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $1463 million. That figure was $77 million in CNA’s case. Elanco Animal Health Incorporated (NYSE:ELAN) is the most popular stock in this table. On the other hand Seattle Genetics, Inc. (NASDAQ:SGEN) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Cna Financial Corporation (NYSE:CNA) is even less popular than SGEN. Hedge funds clearly dropped the ball on CNA as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on CNA as the stock returned 9.9% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
