Hedge Funds Are Coming Back To Casey’s General Stores, Inc. (CASY)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Casey’s General Stores, Inc. (NASDAQ:CASY).

Casey’s General Stores, Inc. (NASDAQ:CASY) investors should pay attention to an increase in enthusiasm from smart money of late. Casey’s General Stores, Inc. (NASDAQ:CASY) was in 24 hedge funds’ portfolios at the end of June. The all time high for this statistic is 28. There were 11 hedge funds in our database with CASY holdings at the end of March. Our calculations also showed that CASY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Paul Tudor Jones of Tudor Investment Corp

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a look at the recent hedge fund action surrounding Casey’s General Stores, Inc. (NASDAQ:CASY).

Do Hedge Funds Think CASY Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 118% from the previous quarter. On the other hand, there were a total of 23 hedge funds with a bullish position in CASY a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

The largest stake in Casey’s General Stores, Inc. (NASDAQ:CASY) was held by AQR Capital Management, which reported holding $35.8 million worth of stock at the end of June. It was followed by Rip Road Capital with a $16.5 million position. Other investors bullish on the company included Bridgewater Associates, McKinley Capital Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Rip Road Capital allocated the biggest weight to Casey’s General Stores, Inc. (NASDAQ:CASY), around 4.46% of its 13F portfolio. McKinley Capital Management is also relatively very bullish on the stock, setting aside 0.81 percent of its 13F equity portfolio to CASY.

As industrywide interest jumped, specific money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in Casey’s General Stores, Inc. (NASDAQ:CASY). Arrowstreet Capital had $11.5 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $3.2 million position during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser’s Magnetar Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Michael Gelband’s ExodusPoint Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Casey’s General Stores, Inc. (NASDAQ:CASY) but similarly valued. We will take a look at Coty Inc (NYSE:COTY), Tenet Healthcare Corp (NYSE:THC), STAAR Surgical Company (NASDAQ:STAA), Euronet Worldwide, Inc. (NASDAQ:EEFT), Change Healthcare Inc. (NASDAQ:CHNG), Nikola Corporation (NASDAQ:NKLA), and Toll Brothers Inc (NYSE:TOL). All of these stocks’ market caps are closest to CASY’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $1040 million. That figure was $130 million in CASY’s case. Change Healthcare Inc. (NASDAQ:CHNG) is the most popular stock in this table. On the other hand Nikola Corporation (NASDAQ:NKLA) is the least popular one with only 12 bullish hedge fund positions. Casey’s General Stores, Inc. (NASDAQ:CASY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CASY is 51.1. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately CASY wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CASY investors were disappointed as the stock returned -1.2% since the end of June (through 10/22) 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 in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.