Is EXPD Stock A Buy or Sell?

Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Expeditors International of Washington, Inc. (NASDAQ:EXPD).

Is EXPD stock a buy? The best stock pickers were selling. The number of long hedge fund bets retreated by 6 in recent months. Expeditors International of Washington, Inc. (NASDAQ:EXPD) was in 25 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 33. Our calculations also showed that EXPD isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 31 hedge funds in our database with EXPD holdings at the end of September.

Noam Gottesman of GLG Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now 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 go over the key hedge fund action regarding Expeditors International of Washington, Inc. (NASDAQ:EXPD).

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

Heading into the first quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in EXPD over the last 22 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

The largest stake in Expeditors International of Washington, Inc. (NASDAQ:EXPD) was held by Cedar Rock Capital, which reported holding $153.1 million worth of stock at the end of December. It was followed by AQR Capital Management with a $133.8 million position. Other investors bullish on the company included Select Equity Group, GLG Partners, and Adage Capital Management. In terms of the portfolio weights assigned to each position Cedar Rock Capital allocated the biggest weight to Expeditors International of Washington, Inc. (NASDAQ:EXPD), around 3.31% of its 13F portfolio. Arjuna Capital is also relatively very bullish on the stock, earmarking 1.17 percent of its 13F equity portfolio to EXPD.

Because Expeditors International of Washington, Inc. (NASDAQ:EXPD) has experienced declining sentiment from the smart money, we can see that there exists a select few money managers who sold off their positions entirely by the end of the fourth quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management cut the biggest investment of all the hedgies followed by Insider Monkey, worth close to $18.5 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund cut about $14.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 6 funds by the end of the fourth quarter.

Let’s now review hedge fund activity in other stocks similar to Expeditors International of Washington, Inc. (NASDAQ:EXPD). We will take a look at PerkinElmer, Inc. (NYSE:PKI), Quest Diagnostics Incorporated (NYSE:DGX), Nucor Corporation (NYSE:NUE), KeyCorp (NYSE:KEY), Citrix Systems, Inc. (NASDAQ:CTXS), Seagate Technology plc (NASDAQ:STX), and Tiffany & Co. (NYSE:TIF). This group of stocks’ market values match EXPD’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.4 hedge funds with bullish positions and the average amount invested in these stocks was $1159 million. That figure was $478 million in EXPD’s case. Tiffany & Co. (NYSE:TIF) is the most popular stock in this table. On the other hand Nucor Corporation (NYSE:NUE) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Expeditors International of Washington, Inc. (NASDAQ:EXPD) is even less popular than NUE. Our overall hedge fund sentiment score for EXPD is 21.7. 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. Hedge funds clearly dropped the ball on EXPD as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 EXPD as the stock returned 15.9% since Q4 (through April 19th) and outperformed the market by an even larger margin.

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