Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards FleetCor Technologies, Inc. (NYSE:FLT) to find out whether there were any major changes in hedge funds’ views.
FleetCor Technologies, Inc. (NYSE:FLT) has experienced a decrease in enthusiasm from smart money in recent months. FleetCor Technologies, Inc. (NYSE:FLT) was in 39 hedge funds’ portfolios at the end of March. The all time high for this statistic is 60. Our calculations also showed that FLT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Lee Ainslie of Maverick Capital
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Do Hedge Funds Think FLT Is A Good Stock To Buy Now?
At first quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards FLT over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Andreas Halvorsen’s Viking Global has the largest position in FleetCor Technologies, Inc. (NYSE:FLT), worth close to $707.1 million, corresponding to 2.1% of its total 13F portfolio. Coming in second is Tiger Global Management LLC, led by Chase Coleman, holding a $174 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish contain Lee Ainslie’s Maverick Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Robert Pitts’s Steadfast Capital Management. In terms of the portfolio weights assigned to each position Incline Global Management allocated the biggest weight to FleetCor Technologies, Inc. (NYSE:FLT), around 8.3% of its 13F portfolio. Banbury Partners is also relatively very bullish on the stock, earmarking 7.69 percent of its 13F equity portfolio to FLT.
Judging by the fact that FleetCor Technologies, Inc. (NYSE:FLT) has witnessed falling interest from hedge fund managers, it’s safe to say that there exists a select few fund managers that decided to sell off their full holdings last quarter. At the top of the heap, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management said goodbye to the biggest stake of the “upper crust” of funds followed by Insider Monkey, worth an estimated $177.2 million in stock, and Jonathan Auerbach’s Hound Partners was right behind this move, as the fund sold off about $61.5 million worth. These moves are important to note, as total hedge fund interest dropped by 5 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as FleetCor Technologies, Inc. (NYSE:FLT) but similarly valued. These stocks are Vulcan Materials Company (NYSE:VMC), EPAM Systems Inc (NYSE:EPAM), EXACT Sciences Corporation (NASDAQ:EXAS), Paycom Software Inc (NYSE:PAYC), Nokia Corporation (NYSE:NOK), Edison International (NYSE:EIX), and McCormick & Company, Incorporated (NYSE:MKC). This group of stocks’ market caps resemble FLT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VMC | 48 | 1317475 | 4 |
| EPAM | 24 | 424015 | -8 |
| EXAS | 41 | 2408537 | 1 |
| PAYC | 46 | 969848 | 11 |
| NOK | 21 | 352915 | 2 |
| EIX | 35 | 1564442 | 5 |
| MKC | 35 | 1969760 | -1 |
| Average | 35.7 | 1286713 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.7 hedge funds with bullish positions and the average amount invested in these stocks was $1287 million. That figure was $1455 million in FLT’s case. Vulcan Materials Company (NYSE:VMC) is the most popular stock in this table. On the other hand Nokia Corporation (NYSE:NOK) is the least popular one with only 21 bullish hedge fund positions. FleetCor Technologies, Inc. (NYSE:FLT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FLT is 52.8. 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 positive signal but 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 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately FLT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FLT were disappointed as the stock returned -2.3% since the end of March (through 6/25) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
