Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Cigna Corporation (NYSE:CI).
Is Cigna (CI) stock a buy or sell? Prominent investors were getting less optimistic. The number of long hedge fund bets were cut by 5 in recent months. Cigna Corporation (NYSE:CI) was in 57 hedge funds’ portfolios at the end of December. The all time high for this statistic is 76. Our calculations also showed that CI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 62 hedge funds in our database with CI positions at the end of the third quarter.
Larry Robbins of Glenview Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). Keeping this in mind we’re going to take a look at the key hedge fund action encompassing Cigna Corporation (NYSE:CI).
Do Hedge Funds Think CI Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 57 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the third quarter of 2020. By comparison, 72 hedge funds held shares or bullish call options in CI a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Viking Global held the most valuable stake in Cigna Corporation (NYSE:CI), which was worth $406.8 million at the end of the fourth quarter. On the second spot was Glenview Capital which amassed $261.3 million worth of shares. Crake Asset Management, Millennium Management, and Eminence Capital 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 Solel Partners allocated the biggest weight to Cigna Corporation (NYSE:CI), around 13.27% of its 13F portfolio. Crake Asset Management is also relatively very bullish on the stock, earmarking 9.16 percent of its 13F equity portfolio to CI.
Because Cigna Corporation (NYSE:CI) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there were a few funds who sold off their full holdings last quarter. At the top of the heap, Farallon Capital sold off the largest investment of the 750 funds watched by Insider Monkey, totaling an estimated $85.1 million in stock. Renaissance Technologies, also said goodbye to its stock, about $80.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 5 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Cigna Corporation (NYSE:CI) but similarly valued. These stocks are Snap Inc. (NYSE:SNAP), Baidu, Inc. (NASDAQ:BIDU), Prologis Inc (NYSE:PLD), Colgate-Palmolive Company (NYSE:CL), Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR), Gilead Sciences, Inc. (NASDAQ:GILD), and Becton, Dickinson and Company (NYSE:BDX). This group of stocks’ market valuations resemble CI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNAP | 63 | 4610841 | 12 |
| BIDU | 51 | 4634061 | 8 |
| PLD | 36 | 655443 | 3 |
| CL | 46 | 1515874 | -1 |
| PBR | 24 | 1335976 | -7 |
| GILD | 72 | 2021867 | 11 |
| BDX | 65 | 3961016 | 3 |
| Average | 51 | 2676440 | 4.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 51 hedge funds with bullish positions and the average amount invested in these stocks was $2676 million. That figure was $2578 million in CI’s case. Gilead Sciences, Inc. (NASDAQ:GILD) is the most popular stock in this table. On the other hand Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR) is the least popular one with only 24 bullish hedge fund positions. Cigna Corporation (NYSE:CI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CI is 56.9. 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 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 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on CI as the stock returned 16.9% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Cigna Holding Co (NYSE:CI)
Follow Cigna Holding Co (NYSE:CI)
Disclosure: None. This article was originally published at Insider Monkey.
