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. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded IHS Markit Ltd. (NYSE:INFO) and determine whether the smart money was really smart about this stock.
Is IHS Markit Ltd. (NYSE:INFO) a bargain? Investors who are in the know were getting more optimistic. The number of bullish hedge fund positions advanced by 3 in recent months. IHS Markit Ltd. (NYSE:INFO) was in 64 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 61. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that INFO 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 we’re going to view the fresh hedge fund action regarding IHS Markit Ltd. (NYSE:INFO).
Matthew Halbower of Pentwater Capital
Do Hedge Funds Think INFO Is A Good Stock To Buy Now?
At Q3’s end, a total of 64 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards INFO over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Pentwater Capital Management was the largest shareholder of IHS Markit Ltd. (NYSE:INFO), with a stake worth $1006.4 million reported as of the end of September. Trailing Pentwater Capital Management was Citadel Investment Group, which amassed a stake valued at $448.3 million. TCI Fund Management, Arrowstreet Capital, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sand Grove Capital Partners allocated the biggest weight to IHS Markit Ltd. (NYSE:INFO), around 26.74% of its 13F portfolio. BCK Capital is also relatively very bullish on the stock, earmarking 11.18 percent of its 13F equity portfolio to INFO.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into IHS Markit Ltd. (NYSE:INFO) headfirst. TCI Fund Management, managed by Chris Hohn, created the largest position in IHS Markit Ltd. (NYSE:INFO). TCI Fund Management had $447.7 million invested in the company at the end of the quarter. Farallon Capital also initiated a $60 million position during the quarter. The following funds were also among the new INFO investors: Jimmy Levin’s Sculptor Capital, Isaac Corre’s Governors Lane, and Michael Hintze’s CQS Cayman LP.
Let’s now take a look at hedge fund activity in other stocks similar to IHS Markit Ltd. (NYSE:INFO). These stocks are Global Payments Inc (NYSE:GPN), IQVIA Holdings, Inc. (NYSE:IQV), Synopsys, Inc. (NASDAQ:SNPS), BCE Inc. (NYSE:BCE), eBay Inc (NASDAQ:EBAY), Palantir Technologies Inc. (NYSE:PLTR), and The Kraft Heinz Company (NASDAQ:KHC). This group of stocks’ market valuations resemble INFO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GPN | 68 | 3462603 | 2 |
| IQV | 66 | 3756655 | -3 |
| SNPS | 43 | 2343901 | 2 |
| BCE | 15 | 129110 | 1 |
| EBAY | 49 | 2097933 | 10 |
| PLTR | 35 | 1634776 | 9 |
| KHC | 33 | 12321504 | 0 |
| Average | 44.1 | 3678069 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 44.1 hedge funds with bullish positions and the average amount invested in these stocks was $3678 million. That figure was $6723 million in INFO’s case. Global Payments Inc (NYSE:GPN) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 15 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 overall hedge fund sentiment score for INFO is 84.2. 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. 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 29.6% in 2021 and still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on INFO as the stock returned 0.5% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
