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 IHS Markit Ltd. (NYSE:INFO).
Is IHS Markit Ltd. (NYSE:INFO) worth your attention right now? Prominent investors are becoming more confident. The number of bullish hedge fund bets advanced by 2 lately. Our calculations also showed that INFO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Steven Cohen of Point72 Asset Management
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to check out the new hedge fund action regarding IHS Markit Ltd. (NYSE:INFO).
What have hedge funds been doing with IHS Markit Ltd. (NYSE:INFO)?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in INFO 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.
When looking at the institutional investors followed by Insider Monkey, Farallon Capital has the biggest position in IHS Markit Ltd. (NYSE:INFO), worth close to $239.1 million, accounting for 2.5% of its total 13F portfolio. The second most bullish fund manager is Select Equity Group, managed by Robert Joseph Caruso, which holds a $230.2 million position; 1.6% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism encompass Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, David Thomas’s Atalan Capital and Greg Poole’s Echo Street Capital Management. In terms of the portfolio weights assigned to each position Atalan Capital allocated the biggest weight to IHS Markit Ltd. (NYSE:INFO), around 6.86% of its portfolio. Sunriver Management is also relatively very bullish on the stock, designating 4.36 percent of its 13F equity portfolio to INFO.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, established the largest position in IHS Markit Ltd. (NYSE:INFO). Point72 Asset Management had $9.5 million invested in the company at the end of the quarter. Principal Global Investors’s Columbus Circle Investors also made a $8.9 million investment in the stock during the quarter. The other funds with brand new INFO positions are Robert Pohly’s Samlyn Capital, Ronald Hua’s Qtron Investments, and Neal Nathani and Darren Dinneen’s Totem Point Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as IHS Markit Ltd. (NYSE:INFO) but similarly valued. We will take a look at Hilton Worldwide Holdings Inc (NYSE:HLT), Sun Life Financial Inc. (NYSE:SLF), Square, Inc. (NYSE:SQ), and Southern Copper Corporation (NYSE:SCCO). All of these stocks’ market caps are similar to INFO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HLT | 48 | 3928940 | 4 |
| SLF | 12 | 259612 | 1 |
| SQ | 44 | 2375472 | -9 |
| SCCO | 13 | 175117 | -2 |
| Average | 29.25 | 1684785 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $1685 million. That figure was $859 million in INFO’s case. Hilton Worldwide Holdings Inc (NYSE:HLT) is the most popular stock in this table. On the other hand Sun Life Financial Inc. (NYSE:SLF) is the least popular one with only 12 bullish hedge fund positions. IHS Markit Ltd. (NYSE:INFO) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on INFO, though not to the same extent, as the stock returned 8.6% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
