In this article we will take a look at whether hedge funds think Cushman & Wakefield plc (NYSE:CWK) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Cushman & Wakefield plc (NYSE:CWK) investors should pay attention to an increase in enthusiasm from smart money lately. Cushman & Wakefield plc (NYSE:CWK) was in 19 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 26. Our calculations also showed that CWK isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Stuart Zimmer of Zimmer Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let's take a look at the new hedge fund action regarding Cushman & Wakefield plc (NYSE:CWK).
Do Hedge Funds Think CWK Is A Good Stock To Buy Now?
At Q1's end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in CWK over the last 23 quarters. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Lakewood Capital Management, managed by Anthony Bozza, holds the most valuable position in Cushman & Wakefield plc (NYSE:CWK). Lakewood Capital Management has a $49.4 million position in the stock, comprising 2.1% of its 13F portfolio. The second largest stake is held by Zimmer Partners, managed by Stuart J. Zimmer, which holds a $18.5 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish consist of Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and Quincy Lee's Ancient Art (Teton Capital). In terms of the portfolio weights assigned to each position Sunriver Management allocated the biggest weight to Cushman & Wakefield plc (NYSE:CWK), around 2.85% of its 13F portfolio. Lakewood Capital Management is also relatively very bullish on the stock, setting aside 2.1 percent of its 13F equity portfolio to CWK.
Consequently, key money managers have been driving this bullishness. Sunriver Management, managed by Will Cook, assembled the biggest position in Cushman & Wakefield plc (NYSE:CWK). Sunriver Management had $15.2 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $2.5 million position during the quarter. The following funds were also among the new CWK investors: Dmitry Balyasny's Balyasny Asset Management, Steve Cohen's Point72 Asset Management, and Donald Sussman's Paloma Partners.
Let's now review hedge fund activity in other stocks similar to Cushman & Wakefield plc (NYSE:CWK). We will take a look at Spectrum Brands Holdings, Inc. (NYSE:SPB), Kirby Corporation (NYSE:KEX), BanColombia S.A. (NYSE:CIB), Bank of Hawaii Corporation (NYSE:BOH), Reata Pharmaceuticals, Inc. (NASDAQ:RETA), Spirit Airlines Incorporated (NASDAQ:SAVE), and Eastern Bankshares, Inc. (NASDAQ:EBC). This group of stocks' market values resemble CWK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SPB,37,618156,2 KEX,23,632227,1 CIB,3,68988,-1 BOH,15,45660,-2 RETA,24,266316,0 SAVE,24,250551,1 EBC,14,105049,-2 Average,20,283850,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $284 million. That figure was $157 million in CWK's case. Spectrum Brands Holdings, Inc. (NYSE:SPB) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 3 bullish hedge fund positions. Cushman & Wakefield plc (NYSE:CWK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CWK is 54.5. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately CWK wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CWK investors were disappointed as the stock returned 3.6% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Get real-time email alerts: Follow Cushman & Wakefield Plc (NYSE:CWK)
Disclosure: None. This article was originally published at Insider Monkey.