Should I buy CNA Financial Corporation (CNA)?
In this article, we’ll analyze whether CNA Financial Corporation (NYSE: CNA) is a good investment right now by following the lead of some of the world’s best investors and building on their ideas. There is no better way to put the immense resources and analytical capabilities of these companies to work for us than to follow their lead in their best ideas. While not all of these picks are winners, our research shows that these picks have historically outperformed the market by double digits every year.
CNA Financial Corporation (NYSE: CNA) was listed in 19 hedge fund portfolios at the end of the first quarter of 2021. The all-time high for this statistic is 21. CNA shareholders recently saw an increase in enthusiasm for money clever. There were 16 hedge funds in our database with CNA holdings at the end of December. Our calculations also showed that CNA is not among the 30 most popular stocks among hedge funds (click for Q1 rank).
If you ask most investors, hedge funds are supposed to be underperforming, old financial vehicles of the past. While there are over 8,000 funds traded right now, our focus is on the top end of that group, around 850 funds. This group of investors is estimated to make up the lion’s share of the total capital of all hedge funds, and by observing their inimitable stock selections, Insider Monkey has uncovered various investment strategies that have historically outperformed more indexes. wide. Insider Monkey’s flagship short hedge fund strategy has outperformed S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Additionally, our monthly newsletter’s portfolio of long stock picks has returned 206.8% since March 2017 (through May 2021) and has beaten the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter from our website.
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, Chuck Schumer recently said legalizing marijuana would be a Senate priority. So we check this under the radar stock who will benefit. We’re going through lists like the top 10 battery stocks to pick the next Tesla that will deliver 10x performance. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can sign up for our free daily newsletter on our homepage. Now let’s review the latest hedge fund action regarding Cna Financial Corporation (NYSE: CNA).
Do hedge funds think CNA is a good stock to buy now?
Heading into the second quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 19% change from the previous quarter. By comparison, 12 hedge funds held bullish stocks or call options in CNA a year ago. With hedge fund positions undergoing their usual ebb and flow, there is a “top tier” of notable hedge fund managers who were significantly increasing their holdings (or already accumulating large positions).
Among the funds tracked by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the largest position in CNA Financial Corporation (NYSE: CNA). Arrowstreet Capital has a $ 29 million position in the stock, comprising less than 0.1 %% of its 13F portfolio. In second place is AQR Capital Management’s Cliff Asness, with a position of $ 9.5 million; less than 0.1 %% of its 13F portfolio is allocated to the company. Other professional fund managers who are optimistic include Israel Englander’s Millennium Management, Dmitry Balyasny’s Balyasny Asset Management, and Steve Leonard’s Pacifica Capital Investments. In terms of the portfolio weights assigned to each position, Pacifica Capital Investments assigned the largest weight to Cna Financial Corporation (NYSE: CNA), approximately 2.45% of its 13F portfolio. Quantamental Technologies is also relatively very bullish on the stock, distributing 1% of its 13F equity portfolio to CNA.
As global interest grew, key fund managers jumped into CNA Financial Corporation (NYSE: CNA). Point72 Asset Management, managed by Steve Cohen, initiated the largest position in CNA Financial Corporation (NYSE: CNA). Point72 Asset Management had invested $ 1.4 million in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also initiated a $ 0.6 million position during the quarter. Other funds with brand new CNA positions are Quantamental Technologies of Ran Pang, PDT Partners of Peter Muller and ExodusPoint Capital of Michael Gelband.
Now let’s review hedge fund activity in other stocks similar to CNA Financial Corporation (NYSE: CNA). We’ll be looking at Signature Bank (NASDAQ: SBNY), Graco Inc. (NYSE: GGG), Atmos Energy Corporation (NYSE: ATO), Chegg Inc (NYSE: CHGG), Annaly Capital Management, Inc. (NYSE: NLY), Advance Auto Parts, Inc. (NYSE: AAP) and AMERCO (NASDAQ: UHAL). The market valuations of this group of stocks are the closest to the CNA market valuation.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position SBNY, 40.925856.12 GGG, 25.327418.0 ATO, 15.172475, -10 CHGG, 33.672189.0 NLY, 15.140155, -6 AAP, 43.1284543.7 UHAL, 23.661125.2 Medium, 27.7.597680.0.7 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 27.7 hedge funds with bullish positions and the average amount invested in these stocks was $ 598 million. That figure was $ 74 million in the case of CNA. Advance Auto Parts, Inc. (NYSE: AAP) is the most popular share in this table. On the other hand, Atmos Energy Corporation (NYSE: ATO) is the least popular with only 15 bullish hedge fund positions. CNA Financial Corporation (NYSE: CNA) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for CNA is 42.3. Stocks with a 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 prefer to spend our time researching the stocks that hedge funds are accumulating on. Our calculations showed that the 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 16 and again topped the market by 7.7 percentage points. Unfortunately, CNA was not as popular as these 5 stocks (hedge fund sentiment was rather bearish); CNA investors were disappointed as the stock has returned 0.5% since the end of March (through 7/16) and has underperformed the market. If you want to invest in large cap stocks with huge upside potential, you should check out the 5 most popular stocks among hedge funds, as most of these stocks have already outperformed the market in 2021.
Receive real-time email alerts: Follow Cna Financial Corp (NYSE: CNA)
Disclosure: none. This article originally appeared on Insider Monkey.