The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of CoStar Group Inc (NASDAQ:CSGP).
CoStar Group Inc (NASDAQ:CSGP) investors should pay attention to a decrease in hedge fund interest of late. CoStar Group Inc (NASDAQ:CSGP) was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 55. Our calculations also showed that CSGP 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. Keeping this in mind let’s take a gander at the recent hedge fund action surrounding CoStar Group Inc (NASDAQ:CSGP).
Charles Akre of Akre Capital Management
Do Hedge Funds Think CSGP Is A Good Stock To Buy Now?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -41% from one quarter earlier. On the other hand, there were a total of 55 hedge funds with a bullish position in CSGP a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Charles Akre’s Akre Capital Management has the biggest position in CoStar Group Inc (NASDAQ:CSGP), worth close to $840.2 million, accounting for 5.2% of its total 13F portfolio. The second largest stake is held by Third Point, led by Dan Loeb, holding a $489.5 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Panayotis Takis Sparaggis’s Alkeon Capital Management, Brian Bares’s Bares Capital Management and Robert Joseph Caruso’s Select Equity Group. In terms of the portfolio weights assigned to each position Lakehouse Capital allocated the biggest weight to CoStar Group Inc (NASDAQ:CSGP), around 8.88% of its 13F portfolio. Wildcat Capital Management is also relatively very bullish on the stock, earmarking 6.5 percent of its 13F equity portfolio to CSGP.
Because CoStar Group Inc (NASDAQ:CSGP) has faced falling interest from the smart money, we can see that there were a few fund managers that slashed their positions entirely by the end of the third quarter. It’s worth mentioning that Ross Turner’s Pelham Capital cut the biggest investment of the 750 funds followed by Insider Monkey, totaling close to $91.1 million in stock, and Doug Silverman and Alexander Klabin’s Senator Investment Group was right behind this move, as the fund said goodbye to about $62.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 20 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CoStar Group Inc (NASDAQ:CSGP) but similarly valued. These stocks are PPG Industries, Inc. (NYSE:PPG), BeiGene, Ltd. (NASDAQ:BGNE), Xcel Energy Inc (NASDAQ:XEL), The Trade Desk, Inc. (NASDAQ:TTD), Archer Daniels Midland Company (NYSE:ADM), Old Dominion Freight Line, Inc. (NASDAQ:ODFL), and Copart, Inc. (NASDAQ:CPRT). This group of stocks’ market caps resemble CSGP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PPG | 30 | 318414 | 4 |
| BGNE | 16 | 6418381 | -5 |
| XEL | 26 | 498007 | 4 |
| TTD | 19 | 499103 | -6 |
| ADM | 27 | 351486 | -14 |
| ODFL | 33 | 709810 | -14 |
| CPRT | 42 | 998095 | -2 |
| Average | 27.6 | 1399042 | -4.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $1399 million. That figure was $2585 million in CSGP’s case. Copart, Inc. (NASDAQ:CPRT) is the most popular stock in this table. On the other hand BeiGene, Ltd. (NASDAQ:BGNE) is the least popular one with only 16 bullish hedge fund positions. CoStar Group Inc (NASDAQ:CSGP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CSGP is 25.8. 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 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 beat the market again by 5.6 percentage points. Unfortunately CSGP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CSGP were disappointed as the stock returned -9.6% 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 many of these stocks already outperformed the market since 2019.
Follow Costar Group Inc. (NASDAQ:CSGP)
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Disclosure: None. This article was originally published at Insider Monkey.
