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 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider CoStar Group Inc (NASDAQ:CSGP) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
CoStar Group Inc (NASDAQ:CSGP) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 32 hedge funds' portfolios at the end of the second quarter of 2019. At the end of this article we will also compare CSGP to other stocks including Liberty Global plc (NASDAQ:LBTYA), The Hartford Financial Services Group, Inc. (NYSE:HIG), and Arista Networks Inc (NYSE:ANET) to get a better sense of its popularity.
If you'd ask most shareholders, hedge funds are assumed to be worthless, old investment tools of years past. While there are more than 8000 funds in operation at present, Our experts hone in on the aristocrats of this group, approximately 750 funds. These investment experts command the majority of the hedge fund industry's total asset base, and by watching their top stock picks, Insider Monkey has brought to light a few investment strategies that have historically surpassed the market. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's view the fresh hedge fund action regarding CoStar Group Inc (NASDAQ:CSGP).
What does smart money think about CoStar Group Inc (NASDAQ:CSGP)?
At the end of the second quarter, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 26 hedge funds with a bullish position in CSGP a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in CoStar Group Inc (NASDAQ:CSGP) was held by Bares Capital Management, which reported holding $296.3 million worth of stock at the end of March. It was followed by Select Equity Group with a $234.8 million position. Other investors bullish on the company included Melvin Capital Management, Citadel Investment Group, and Wildcat Capital Management.
Judging by the fact that CoStar Group Inc (NASDAQ:CSGP) has faced a decline in interest from the aggregate hedge fund industry, it's easy to see that there is a sect of hedge funds that decided to sell off their positions entirely in the second quarter. At the top of the heap, Mariko Gordon's Daruma Asset Management sold off the biggest investment of the "upper crust" of funds watched by Insider Monkey, valued at about $36.9 million in stock, and James Crichton's Hitchwood Capital Management was right behind this move, as the fund sold off about $14 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to CoStar Group Inc (NASDAQ:CSGP). We will take a look at Liberty Global plc (NASDAQ:LBTYA), The Hartford Financial Services Group, Inc. (NYSE:HIG), Arista Networks Inc (NYSE:ANET), and Fifth Third Bancorp (NASDAQ:FITB). This group of stocks' market values are similar to CSGP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LBTYA,27,1478573,-1 HIG,30,1125805,-7 ANET,28,411623,0 FITB,29,814784,-9 Average,28.5,957696,-4.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.5 hedge funds with bullish positions and the average amount invested in these stocks was $958 million. That figure was $1170 million in CSGP's case. The Hartford Financial Services Group Inc (NYSE:HIG) is the most popular stock in this table. On the other hand Liberty Global plc (NASDAQ:LBTYA) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks CoStar Group Inc (NASDAQ:CSGP) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks (see the video below) among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on CSGP as the stock returned 7.1% during Q3 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations. 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.