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. Insider Monkey finished processing 867 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2021. What do these smart investors think about Canadian Pacific Railway Limited (NYSE:CP)?
Is Canadian Pacific Railway Limited (NYSE:CP) the right investment to pursue these days? Money managers were buying. The number of long hedge fund positions moved up by 13 recently. Canadian Pacific Railway Limited (NYSE:CP) was in 38 hedge funds’ portfolios at the end of September. The all time high for this statistic is 40. Our calculations also showed that CP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 25 hedge funds in our database with CP positions at the end of the second quarter.
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 we’re going to take a peek at the key hedge fund action surrounding Canadian Pacific Railway Limited (NYSE:CP).
Chris Hohn of TCI Fund Management
Do Hedge Funds Think CP Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 52% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CP over the last 25 quarters. With the smart money’s 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).
Among these funds, TCI Fund Management held the most valuable stake in Canadian Pacific Railway Limited (NYSE:CP), which was worth $3640.9 million at the end of the third quarter. On the second spot was Egerton Capital Limited which amassed $1871 million worth of shares. Viking Global, Two Sigma Advisors, and Echo Street Capital Management 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 JNE Partners allocated the biggest weight to Canadian Pacific Railway Limited (NYSE:CP), around 11.24% of its 13F portfolio. Egerton Capital Limited is also relatively very bullish on the stock, dishing out 8.89 percent of its 13F equity portfolio to CP.
As aggregate interest increased, key money managers have been driving this bullishness. Viking Global, managed by Andreas Halvorsen, established the most valuable position in Canadian Pacific Railway Limited (NYSE:CP). Viking Global had $224.3 million invested in the company at the end of the quarter. Ben Jacobs’s Anomaly Capital Management also made a $73.3 million investment in the stock during the quarter. The other funds with brand new CP positions are Stephen J. Errico’s Locust Wood Capital Advisers, Jonathan Esfandi’s JNE Partners, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Canadian Pacific Railway Limited (NYSE:CP) but similarly valued. These stocks are Newmont Corporation (NYSE:NEM), Canadian Natural Resources Limited (NYSE:CNQ), National Grid plc (NYSE:NGG), Spotify Technology S.A. (NYSE:SPOT), Dow Inc. (NYSE:DOW), Simon Property Group, Inc (NYSE:SPG), and Microchip Technology Incorporated (NASDAQ:MCHP). This group of stocks’ market valuations are closest to CP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NEM | 48 | 774451 | -7 |
| CNQ | 27 | 956988 | 0 |
| NGG | 5 | 314057 | -2 |
| SPOT | 48 | 3038733 | 0 |
| DOW | 42 | 747419 | 2 |
| SPG | 38 | 726426 | 1 |
| MCHP | 41 | 1122273 | -9 |
| Average | 35.6 | 1097192 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.6 hedge funds with bullish positions and the average amount invested in these stocks was $1097 million. That figure was $6639 million in CP’s case. Newmont Corporation (NYSE:NEM) is the most popular stock in this table. On the other hand National Grid plc (NYSE:NGG) is the least popular one with only 5 bullish hedge fund positions. Canadian Pacific Railway Limited (NYSE:CP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CP is 76.9. 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. Hedge funds were also right about betting on CP as the stock returned 7.6% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Canadian Pacific Railway Ltd (NYSE:CP)
Follow Canadian Pacific Railway Ltd (NYSE:CP)
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Disclosure: None. This article was originally published at Insider Monkey.
