Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. In this article we are going to take a look at smart money sentiment towards CNH Industrial NV (NYSE:CNHI).
Is CNH Industrial NV (NYSE:CNHI) a bargain? The best stock pickers are betting on the stock. The number of long hedge fund bets advanced by 4 lately. 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 Cincinnati Financial Corporation (NASDAQ:CINF), Quest Diagnostics Inc (NYSE:DGX), and Cemex SAB de CV (ADR) (NYSE:CX) to gather more data points.
To most market participants, hedge funds are viewed as worthless, old financial vehicles of the past. While there are over 8000 funds in operation today, We choose to focus on the upper echelon of this club, approximately 700 funds. These money managers oversee most of the smart money’s total asset base, and by following their highest performing equity investments, Insider Monkey has spotted many investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, let’s take a look at the latest action encompassing CNH Industrial NV (NYSE:CNHI).
What does the smart money think about CNH Industrial NV (NYSE:CNHI)?
Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 44% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Mason Hawkins’s Southeastern Asset Management has the most valuable position in CNH Industrial NV (NYSE:CNHI), worth close to $226.9 million, amounting to 1.9% of its total 13F portfolio. On Southeastern Asset Management’s heels is William B. Gray of Orbis Investment Management, with an $86 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish contain Mario Gabelli’s GAMCO Investors, Jim Simons’s Renaissance Technologies and Martin Whitman’s Third Avenue Management.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, created the largest position in CNH Industrial NV (NYSE:CNHI). Renaissance Technologies had $13.9 million invested in the company at the end of the quarter. Jacob Gottlieb’s Visium Asset Management also initiated an $1.3 million position during the quarter. The other funds with brand new CNHI positions are D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CNH Industrial NV (NYSE:CNHI) but similarly valued. These stocks are Cincinnati Financial Corporation (NASDAQ:CINF), Quest Diagnostics Inc (NYSE:DGX), Cemex SAB de CV (ADR) (NYSE:CX), and Snap-on Incorporated (NYSE:SNA). This group of stocks’ market values are closest to CNHI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CINF | 23 | 652563 | 6 |
| DGX | 27 | 317876 | -5 |
| CX | 18 | 186344 | -3 |
| SNA | 31 | 585872 | 6 |
As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $436 million. That figure was $379 million in CNHI’s case. Snap-on Incorporated (NYSE:SNA) is the most popular stock in this table. On the other hand Cemex SAB de CV (ADR) (NYSE:CX) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks CNH Industrial NV (NYSE:CNHI) is even less popular than CX. 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 despite the increase in the total number of funds long CNHI. 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.