Is CNNE Stock A Buy or Sell?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Cannae Holdings, Inc. (NYSE:CNNE).

Is CNNE stock a buy? The smart money was turning bullish. The number of bullish hedge fund bets moved up by 5 lately. Cannae Holdings, Inc. (NYSE:CNNE) was in 34 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 43. Our calculations also showed that CNNE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 29 hedge funds in our database with CNNE holdings at the end of September.

Blair Levinsky of Waratah Capital Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy 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. Keeping this in mind let’s go over the recent hedge fund action regarding Cannae Holdings, Inc. (NYSE:CNNE).

Do Hedge Funds Think CNNE Is A Good Stock To Buy Now?

At the end of December, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CNNE over the last 22 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Seth Rosen’s Nitorum Capital has the most valuable position in Cannae Holdings, Inc. (NYSE:CNNE), worth close to $164.9 million, accounting for 6.4% of its total 13F portfolio. The second most bullish fund manager is Empyrean Capital Partners, managed by Michael A. Price and Amos Meron, which holds a $83.9 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions encompass Ricky Sandler’s Eminence Capital, Ravi Chopra’s Azora Capital and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position 11 Capital Partners allocated the biggest weight to Cannae Holdings, Inc. (NYSE:CNNE), around 7.1% of its 13F portfolio. Nitorum Capital is also relatively very bullish on the stock, setting aside 6.38 percent of its 13F equity portfolio to CNNE.

As industrywide interest jumped, key hedge funds were breaking ground themselves. 11 Capital Partners, managed by Jason McDougall, established the biggest position in Cannae Holdings, Inc. (NYSE:CNNE). 11 Capital Partners had $24.2 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors also made a $16.3 million investment in the stock during the quarter. The other funds with brand new CNNE positions are Allon Hellmann’s Full18 Capital, Joseph Cornell’s Bluegrass Capital Partners, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cannae Holdings, Inc. (NYSE:CNNE) but similarly valued. These stocks are Atlantica Sustainable Infrastructure plc (NASDAQ:AY), Hexcel Corporation (NYSE:HXL), Bank OZK (NASDAQ:OZK), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), Park Hotels & Resorts Inc. (NYSE:PK), The Hain Celestial Group, Inc. (NASDAQ:HAIN), and Kornit Digital Ltd. (NASDAQ:KRNT). This group of stocks’ market caps are similar to CNNE’s market cap.

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As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $358 million. That figure was $534 million in CNNE’s case. Aerojet Rocketdyne Holdings Inc (NYSE:AJRD) is the most popular stock in this table. On the other hand Park Hotels & Resorts Inc. (NYSE:PK) is the least popular one with only 13 bullish hedge fund positions. Cannae Holdings, Inc. (NYSE:CNNE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CNNE is 79.4. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 7.9% in 2021 through April 1st and beat the market again by 0.4 percentage points. Unfortunately CNNE wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on CNNE were disappointed as the stock returned -10.3% since the end of December (through 4/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.