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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Cannae Holdings, Inc. (NYSE:CNNE) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is Cannae Holdings, Inc. (NYSE:CNNE) a first-rate investment now? The best stock pickers were taking a bullish view. The number of long hedge fund positions rose by 1 in recent months. Cannae Holdings, Inc. (NYSE:CNNE) was in 35 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that CNNE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 34 hedge funds in our database with CNNE holdings at the end of June.
Ricky Sandler of Eminence Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now let's review the key hedge fund action regarding Cannae Holdings, Inc. (NYSE:CNNE).
Do Hedge Funds Think CNNE Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from one quarter earlier. By comparison, 29 hedge funds held shares or bullish call options in CNNE a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Nitorum Capital was the largest shareholder of Cannae Holdings, Inc. (NYSE:CNNE), with a stake worth $106.3 million reported as of the end of September. Trailing Nitorum Capital was Empyrean Capital Partners, which amassed a stake valued at $59 million. Eminence Capital, D E Shaw, and Azora Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Nitorum Capital allocated the biggest weight to Cannae Holdings, Inc. (NYSE:CNNE), around 5.05% of its 13F portfolio. Bayberry Capital Partners is also relatively very bullish on the stock, setting aside 4.29 percent of its 13F equity portfolio to CNNE.
As one would reasonably expect, specific money managers were leading the bulls' herd. Centiva Capital, managed by Karim Abbadi and Edward McBride, established the largest position in Cannae Holdings, Inc. (NYSE:CNNE). Centiva Capital had $7.6 million invested in the company at the end of the quarter. Nathaniel August's Mangrove Partners also initiated a $6.3 million position during the quarter. The other funds with new positions in the stock are Prem Watsa's Fairfax Financial Holdings, Greg Eisner's Engineers Gate Manager, and Ran Pang's Quantamental Technologies.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Cannae Holdings, Inc. (NYSE:CNNE) but similarly valued. These stocks are United States Cellular Corporation (NYSE:USM), Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), GrafTech International Ltd. (NYSE:EAF), CVB Financial Corp. (NASDAQ:CVBF), Sharecare Inc. (NASDAQ:SHCR), Advantage Solutions Inc. (NASDAQ:ADV), and Live Oak Bancshares Inc (NASDAQ:LOB). This group of stocks' market valuations are similar to CNNE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position USM,9,72313,1 KTOS,15,232817,-3 EAF,31,247108,-5 CVBF,18,50453,5 SHCR,10,60480,10 ADV,20,370785,-4 LOB,10,87812,-1 Average,16.1,160253,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $160 million. That figure was $446 million in CNNE's case. GrafTech International Ltd. (NYSE:EAF) is the most popular stock in this table. On the other hand United States Cellular Corporation (NYSE:USM) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Cannae Holdings, Inc. (NYSE:CNNE) is more popular among hedge funds. Our overall hedge fund sentiment score for CNNE is 80.4. 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. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately CNNE wasn't nearly as popular as these 5 stocks and hedge funds that were betting on CNNE were disappointed as the stock returned -5% since the end of the third quarter (through 11/30) 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 since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.