Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Corelogic Inc (NYSE:CLGX) and compare its performance to hedge funds’ consensus picks in 2019.
Is Corelogic Inc (NYSE:CLGX) the right investment to pursue these days? Investors who are in the know are becoming more confident. The number of long hedge fund positions went up by 5 lately. Our calculations also showed that CLGX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings). CLGX was in 28 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with CLGX holdings at the end of the previous quarter.
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.
David E. Shaw of D.E. Shaw
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock is still extremely cheap despite already gaining 20 percent. With all of this in mind let’s analyze the recent hedge fund action surrounding Corelogic Inc (NYSE:CLGX).
How have hedgies been trading Corelogic Inc (NYSE:CLGX)?
At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CLGX over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Corelogic Inc (NYSE:CLGX) was held by D E Shaw, which reported holding $117.1 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $87.8 million position. Other investors bullish on the company included Renaissance Technologies, Echo Street Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position Prana Capital Management allocated the biggest weight to Corelogic Inc (NYSE:CLGX), around 1.33% of its 13F portfolio. AlphaOne Capital Partners is also relatively very bullish on the stock, dishing out 0.73 percent of its 13F equity portfolio to CLGX.
As one would reasonably expect, key hedge funds have jumped into Corelogic Inc (NYSE:CLGX) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, established the most outsized position in Corelogic Inc (NYSE:CLGX). Balyasny Asset Management had $3.1 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also made a $0.9 million investment in the stock during the quarter. The following funds were also among the new CLGX investors: Paul Tudor Jones’s Tudor Investment Corp, Paul Marshall and Ian Wace’s Marshall Wace, and David Harding’s Winton Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Corelogic Inc (NYSE:CLGX). These stocks are Coherent, Inc. (NASDAQ:COHR), DDICK’S Sporting Goods, Inc. (NYSE:DKS), Chimera Investment Corporation (NYSE:CIM), and Rayonier Inc. (NYSE:RYN). This group of stocks’ market valuations are closest to CLGX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COHR | 17 | 227281 | -2 |
| DKS | 25 | 472598 | 2 |
| CIM | 12 | 132694 | -1 |
| RYN | 13 | 317215 | -1 |
| Average | 16.75 | 287447 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $287 million. That figure was $371 million in CLGX’s case. DICK’S Sporting Goods, Inc. (NYSE:DKS) is the most popular stock in this table. On the other hand Chimera Investment Corporation (NYSE:CIM) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Corelogic Inc (NYSE:CLGX) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. Unfortunately CLGX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CLGX were disappointed as the stock returned 30.8% in 2019 and trailed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 65 percent of these stocks outperformed the market in 2019.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.