After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Canadian Imperial Bank of Commerce (NYSE:CM).
Canadian Imperial Bank of Commerce (NYSE:CM) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 15 hedge funds' portfolios at the end of the first quarter of 2019. At the end of this article we will also compare CM to other stocks including Carnival Corporation (NYSE:CCL), Delta Air Lines, Inc. (NYSE:DAL), and The Williams Companies, Inc. (NYSE:WMB) to get a better sense of its popularity.
If you'd ask most market participants, hedge funds are seen as slow, old investment tools of years past. While there are more than 8000 funds with their doors open today, Our researchers look at the elite of this club, about 750 funds. These hedge fund managers preside over most of all hedge funds' total asset base, and by observing their first-class equity investments, Insider Monkey has determined numerous investment strategies that have historically exceeded the market. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's review the key hedge fund action regarding Canadian Imperial Bank of Commerce (NYSE:CM).
How have hedgies been trading Canadian Imperial Bank of Commerce (NYSE:CM)?
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2018. On the other hand, there were a total of 14 hedge funds with a bullish position in CM a year ago. 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, AQR Capital Management was the largest shareholder of Canadian Imperial Bank of Commerce (NYSE:CM), with a stake worth $142.1 million reported as of the end of March. Trailing AQR Capital Management was Renaissance Technologies, which amassed a stake valued at $92.3 million. GLG Partners, Two Sigma Advisors, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Since Canadian Imperial Bank of Commerce (NYSE:CM) has experienced a decline in interest from the smart money, logic holds that there lies a certain "tier" of hedgies that elected to cut their entire stakes last quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dumped the biggest investment of all the hedgies watched by Insider Monkey, comprising about $42 million in stock. Jeffrey Talpins's fund, Element Capital Management, also said goodbye to its stock, about $0.8 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Canadian Imperial Bank of Commerce (NYSE:CM) but similarly valued. These stocks are Carnival Corporation (NYSE:CCL), Delta Air Lines, Inc. (NYSE:DAL), The Williams Companies, Inc. (NYSE:WMB), and Activision Blizzard, Inc. (NASDAQ:ATVI). This group of stocks' market caps are similar to CM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CCL,28,567796,-11 DAL,60,6467050,-13 WMB,32,1694369,-7 ATVI,50,2741166,-9 Average,42.5,2867595,-10 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.5 hedge funds with bullish positions and the average amount invested in these stocks was $2868 million. That figure was $321 million in CM's case. Delta Air Lines, Inc. (NYSE:DAL) is the most popular stock in this table. On the other hand Carnival Corporation (NYSE:CCL) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks Canadian Imperial Bank of Commerce (NYSE:CM) is even less popular than CCL. Hedge funds dodged a bullet by taking a bearish stance towards CM. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CM investors were disappointed as the stock returned -0.6% during the same time frame and underperformed 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 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.