After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards XPO Logistics Inc (NYSE:XPO).
XPO Logistics Inc investors should pay attention to an increase in hedge fund sentiment of late. At the end of this article we will also compare XPO to other stocks, including Convergys Corporation (NYSE:CVG), F.N.B. Corp (NYSE:FNB), and Sunedison Inc (NYSE:SUNE) to get a better sense of its popularity.
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To most market participants, hedge funds are seen as underperforming, old financial tools of the past. While there are over 8000 funds with their doors open today, We hone in on the leaders of this club, about 700 funds. These money managers have their hands on the lion’s share of the smart money’s total capital, and by watching their unrivaled stock picks, Insider Monkey has discovered a few investment strategies that have historically outrun the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Keeping this in mind, let’s take a look at the key action encompassing XPO Logistics Inc (NYSE:XPO).
What have hedge funds been doing with XPO Logistics Inc (NYSE:XPO)?
At the Q3’s end, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Orbis Investment Management, managed by William B. Gray, holds the biggest position in XPO Logistics Inc (NYSE:XPO). Orbis Investment Management has a $230.9 million position in the stock, comprising 2% of its 13F portfolio. The second largest stake is held by Harvard Management Co, led by Jane Mendillo, holding a $96.4 million position; 7.6% of its 13F portfolio is allocated to the stock. The remaining members of the smart money with similar optimism comprise Sander Gerber’s Hudson Bay Capital Management, James Dinan’s York Capital Management and Anand Desai’s Darsana Capital Partners.
Consequently, key hedge funds have been driving this bullishness. Luminus Management, managed by Jonathan Barrett and Paul Segal, assembled the most valuable position in XPO Logistics Inc (NYSE:XPO). Luminus Management had $34.6 million invested in the company at the end of the quarter. Bart Baum’s Ionic Capital Management also initiated a $21.2 million position during the quarter. The other funds with brand new XPO positions are Mike Masters’ Masters Capital Management, George Soros’ Soros Fund Management, and Israel Englander’s Millennium Management.
Let’s check out hedge fund activity in other stocks similar to XPO Logistics Inc (NYSE:XPO). We will take a look at Convergys Corporation (NYSE:CVG), F.N.B. Corp (NYSE:FNB), Sunedison Inc (NYSE:SUNE), and Chemed Corporation (NYSE:CHE). This group of stocks’ market valuations are similar to XPO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVG | 20 | 147888 | 2 |
| FNB | 12 | 57118 | 3 |
| SUNE | 73 | 1056855 | -20 |
| CHE | 14 | 190086 | 3 |
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $363 million, compared to $867 million in XPO’s case. Sunedison Inc (NYSE:SUNE) is the most popular stock in this table. On the other hand F.N.B. Corp (NYSE:FNB) is the least popular one with only 12 bullish hedge fund positions. XPO Logistics Inc (NYSE:XPO) 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 SUNE might be a better candidate to consider a long position.
