What Do Hedge Funds Think of Canadian Imperial Bank of Commerce (USA) (CM)?

Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30, 2015. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about Canadian Imperial Bank of Commerce (USA) (NYSE:CM).

Is Canadian Imperial Bank of Commerce (USA) (NYSE:CM) going to take off soon? Hedge funds are betting on the stock. The number of long hedge fund bets went up by 3 in recent months. CM was in 14 hedge funds’ portfolios at the end of the third quarter of 2015. There were 11 hedge funds in our database with CM holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), Becton, Dickinson and Co. (NYSE:BDX), and American Electric Power Company, Inc. (NYSE:AEP) to gather more data points.

Now, we’re going to go over the new action encompassing Canadian Imperial Bank of Commerce (USA) (NYSE:CM).

How are hedge funds trading Canadian Imperial Bank of Commerce (USA) (NYSE:CM)?

Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Canadian Imperial Bank of Commerce (USA) (NYSE:CM). AQR Capital Management has a $101.6 million position in the stock, comprising 0.2% of its 13F portfolio. On AQR Capital Management’s heels is Eric Sprott of Sprott Asset Management, with a $24.1 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions encompass of D E Shaw and Jim Simons’s Renaissance Technologies.

As one would reasonably expect, some big names were leading the bulls’ herd. Sprott Asset Management, managed by Eric Sprott, assembled the most outsized position in Canadian Imperial Bank of Commerce (USA) (NYSE:CM). Sprott Asset Management had $24.1 million invested in the company at the end of the quarter. The other funds with new positions in the stock are Neil Chriss’s Hutchin Hill Capital, John Overdeck and David Siegel’s Two Sigma Advisors, and Benjamin A. Smith’s Laurion Capital Management.

Let’s go over hedge fund activity in other stocks similar to Canadian Imperial Bank of Commerce (USA) (NYSE:CM). These stocks are Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), Becton, Dickinson and Co. (NYSE:BDX), American Electric Power Company, Inc. (NYSE:AEP), and The Chubb Corporation (NYSE:CB). This group of stocks’ market caps are closest to CM’s market cap.

As you can see these stocks had an average of 34.25 hedge funds with bullish positions and the average amount invested in these stocks was $894 million. That figure was $202 million in CM’s case. The Chubb Corporation (NYSE:CB) is the most popular stock in this table. On the other hand Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks Canadian Imperial Bank of Commerce (USA) (NYSE:CM) is even less popular than PBR. 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.