After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the successful hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Commerce Bancshares, Inc. (NASDAQ:CBSH).
Commerce Bancshares, Inc. (NASDAQ:CBSH) was in 8 hedge funds’ portfolios at the end of September. CBSH investors should pay attention to an increase in hedge fund sentiment recently. There were 6 hedge funds in our database with CBSH holdings at the end of the previous quarter. At the end of this article we will also compare CBSH to other stocks including Microsemi Corporation (NASDAQ:MSCC), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), and Phillips 66 Partners LP (NYSE:PSXP) to get a better sense of its popularity.
Follow Commerce Bancshares Inc (NASDAQ:CBSH)
Follow Commerce Bancshares Inc (NASDAQ:CBSH)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, we’re going to take a glance at the latest action surrounding Commerce Bancshares, Inc. (NASDAQ:CBSH).
What does the smart money think about Commerce Bancshares, Inc. (NASDAQ:CBSH)?
Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CBSH over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, led by Cliff Asness, holds the most valuable position in Commerce Bancshares, Inc. (NASDAQ:CBSH). AQR Capital Management has a $27.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On AQR Capital Management’s heels is Dmitry Balyasny of Balyasny Asset Management, with a $17.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism consist of Martin Whitman’s Third Avenue Management, George Hall’s Clinton Group and Solomon Kumin’s Folger Hill Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, key hedge funds were breaking ground themselves. Clinton Group, led by George Hall, created the most valuable position in Commerce Bancshares, Inc. (NASDAQ:CBSH). Clinton Group had $3.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.7 million position during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Commerce Bancshares, Inc. (NASDAQ:CBSH). We will take a look at Microsemi Corporation (NASDAQ:MSCC), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), Phillips 66 Partners LP (NYSE:PSXP), and Casey’s General Stores, Inc. (NASDAQ:CASY). This group of stocks’ market values are closest to CBSH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MSCC | 25 | 189632 | 6 |
| TARO | 14 | 107519 | 2 |
| PSXP | 8 | 42019 | 3 |
| CASY | 22 | 448259 | -6 |
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $61 million in CBSH’s case. Microsemi Corporation (NASDAQ:MSCC) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Commerce Bancshares, Inc. (NASDAQ:CBSH) is even less popular than PSXP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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