Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the third quarter. Among them, Valeant and Micron ranked among the top 30 picks and both lost around 20%. Citigroup, which was the third most popular stock, lost 10% amid uncertainty regarding the interest rates. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Progressive Waste Solutions Ltd (USA) (NYSE:BIN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Enstar Group Ltd. (NASDAQ:ESGR), WGL Holdings Inc (NYSE:WGL), and Cypress Semiconductor Corporation (NASDAQ:CY) to gather more data points.
Follow Waste Connections Inc. (NYSE:WCN)
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Now, let’s analyze the key action encompassing Progressive Waste Solutions Ltd (USA) (NYSE:BIN).
How are hedge funds trading Progressive Waste Solutions Ltd (USA) (NYSE:BIN)?
According to Insider Monkey’s hedge fund database, Blue Harbour Group, managed by Clifton S. Robbins, holds the number one position in Progressive Waste Solutions Ltd (USA) (NYSE:BIN). Blue Harbour Group has a $152.5 million position in the stock, comprising 4.8% of its 13F portfolio. Coming in second is Renaissance Technologies, led by Jim Simons, holding a $48.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism consist of Mario Gabelli’s GAMCO Investors, Kenneth Squire’s 13D Management and Ken Griffin’s Citadel Investment Group.
At the top of the heap, Eric Sprott’s Sprott Asset Management cut the largest stake of the 700 funds tracked by Insider Monkey, worth an estimated $7.7 million in stock, and Joel Greenblatt’s Gotham Asset Management was right behind this move, as the fund sold off about $3.4 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Progressive Waste Solutions Ltd (USA) (NYSE:BIN). We will take a look at Enstar Group Ltd. (NASDAQ:ESGR), WGL Holdings Inc (NYSE:WGL), Cypress Semiconductor Corporation (NASDAQ:CY), and Outfront Media Inc (NYSE:OUT). This group of stocks’ market values resemble BIN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESGR | 11 | 319070 | -1 |
| WGL | 11 | 53686 | 0 |
| CY | 32 | 649609 | -3 |
| OUT | 13 | 139666 | -6 |
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $291 million. That figure was $277 million in BIN’s case. Cypress Semiconductor Corporation (NASDAQ:CY) is the most popular stock in this table. On the other hand Enstar Group Ltd. (NASDAQ:ESGR) is the least popular one with only 11 bullish hedge fund positions. Progressive Waste Solutions Ltd (USA) (NYSE:BIN) 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 CY might be a better candidate to consider a long position.
