Is CASY Stock A Buy or Sell?

In this article we will take a look at whether hedge funds think Casey’s General Stores, Inc. (NASDAQ:CASY) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is CASY stock a buy? The smart money was buying. The number of long hedge fund positions advanced by 2 recently. Casey’s General Stores, Inc. (NASDAQ:CASY) was in 23 hedge funds’ portfolios at the end of December. The all time high for this statistic is 28. Our calculations also showed that CASY isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

James Dinan of York Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Keeping this in mind we’re going to view the latest hedge fund action regarding Casey’s General Stores, Inc. (NASDAQ:CASY).

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

At fourth quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the third quarter of 2020. By comparison, 22 hedge funds held shares or bullish call options in CASY a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Cliff Asness’s AQR Capital Management has the biggest position in Casey’s General Stores, Inc. (NASDAQ:CASY), worth close to $30.4 million, corresponding to 0.1% of its total 13F portfolio. Coming in second is James Dinan of York Capital Management, with a $22.1 million position; 2.2% of its 13F portfolio is allocated to the company. Some other peers that are bullish comprise Ken Griffin’s Citadel Investment Group, Dennis Goldstein’s Rip Road Capital and Ray Dalio’s Bridgewater Associates. 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 4.69% of its 13F portfolio. York Capital Management is also relatively very bullish on the stock, dishing out 2.17 percent of its 13F equity portfolio to CASY.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Paloma Partners, managed by Donald Sussman, established the biggest position in Casey’s General Stores, Inc. (NASDAQ:CASY). Paloma Partners had $0.6 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also initiated a $0.5 million position during the quarter. The following funds were also among the new CASY investors: Alec Litowitz and Ross Laser’s Magnetar Capital and Minhua Zhang’s Weld Capital Management.

Let’s check out hedge fund activity in other stocks similar to Casey’s General Stores, Inc. (NASDAQ:CASY). These stocks are Ballard Power Systems Inc. (NASDAQ:BLDP), ANGI Inc (NASDAQ:ANGI), Woori Financial Group Inc. (NYSE:WF), CubeSmart (NYSE:CUBE), DXC Technology Company (NYSE:DXC), Hill-Rom Holdings, Inc. (NYSE:HRC), and Kimco Realty Corp (NYSE:KIM). This group of stocks’ market caps are similar to CASY’s market cap.

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As you can see these stocks had an average of 23.6 hedge funds with bullish positions and the average amount invested in these stocks was $323 million. That figure was $121 million in CASY’s case. DXC Technology Company (NYSE:DXC) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 1 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 60.6. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on CASY as the stock returned 25.8% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.

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