How do we determine whether FedEx Corporation (NYSE:FDX) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is FedEx Corporation a healthy stock for your portfolio? Investors who are in the know are taking an optimistic view. The number of long hedge fund positions increased by 1 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The Southern Company (NYSE:SO), Carnival Corporation (NYSE:CCL), and Itau Unibanco Holding SA (ADR) (NYSE:ITUB) to gather more data points.
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In the financial world, there are numerous tools shareholders can use to appraise their holdings. A couple of the best tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top money managers can beat the market by a healthy amount (see the details here).
Keeping this in mind, we’re going to take a look at the new action encompassing FedEx Corporation (NYSE:FDX).
What does the smart money think about FedEx Corporation (NYSE:FDX)?
At the end of the third quarter, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, inching up by 2% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mason Hawkins’s Southeastern Asset Management has the largest position in FedEx Corporation (NYSE:FDX), worth close to $919.5 million, corresponding to 7.8% of its total 13F portfolio. On Southeastern Asset Management’s heels is Edgar Wachenheim of Greenhaven Associates, with a $651.3 million position; 13% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism comprise Michael Larson’s Bill & Melinda Gates Foundation Trust, and D. E. Shaw’s D E Shaw.
Consequently, specific money managers have jumped into FedEx Corporation (NYSE:FDX) headfirst. York Capital Management, managed by James Dinan, created the biggest call position in FedEx Corporation (NYSE:FDX). York Capital Management had $320.4 million invested in FDX call options at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $134.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Masters’s Masters Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Anthony Bozza’s Lakewood Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to FedEx Corporation (NYSE:FDX). These stocks are The Southern Company (NYSE:SO), Carnival Corporation (NYSE:CCL), Itau Unibanco Holding SA (ADR) (NYSE:ITUB), and EOG Resources Inc (NYSE:EOG). This group of stocks’ market valuations are closest to FDX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SO | 17 | 360541 | -2 |
| CCL | 53 | 2125468 | 4 |
| ITUB | 18 | 264160 | -5 |
| EOG | 60 | 1539301 | 3 |
As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1.07 billion. That figure was $4.14 billion in FDX’s case, a positive signal. EOG Resources Inc (NYSE:EOG) is the most popular stock in this table, while The Southern Company (NYSE:SO) is the outsider with only 17 bullish hedge fund positions. FedEx Corporation (NYSE:FDX) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EOG might be a better candidate to consider a long position.
