Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze World Fuel Services Corp (NYSE:INT) from the perspective of those elite funds.
Is World Fuel Services Corp (NYSE:INT) ready to rally soon? The smart money is getting less optimistic. The number of bullish hedge fund positions retreated by 3 in recent months. 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 Kirby Corporation (NYSE:KEX), Seaboard Corporation (NYSEAMEX:SEB), and AU Optronics Corp. (ADR) (NYSE:AUO) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Hedge fund activity in World Fuel Services Corp (NYSE:INT)
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a 13% slide from the previous quarter. While hedge fund ownership of the stock has been somewhat volatile over the last year, it’s remained within a narrow range. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Cliff Asness’ AQR Capital Management has the most valuable position in World Fuel Services Corp (NYSE:INT), worth close to $37.1 million. The second largest stake is held by Amy Minella of Cardinal Capital, with a $27.7 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism contain Joel Greenblatt’s Gotham Asset Management, Jim Simons’ Renaissance Technologies and Martin Whitman’s Third Avenue Management.
Judging by the fact that World Fuel Services Corp (NYSE:INT) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few money managers that elected to cut their full holdings by the end of the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of all the hedgies followed by Insider Monkey, valued at an estimated $0.5 million in stock. Joshua Packwood and Schuster Tanger’s fund, Radix Partners, also dropped its stock, about $0.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to World Fuel Services Corp (NYSE:INT). We will take a look at Kirby Corporation (NYSE:KEX), Seaboard Corporation (NYSEAMEX:SEB), AU Optronics Corp. (ADR) (NYSE:AUO), and Pitney Bowes Inc. (NYSE:PBI). This group of stocks’ market values are closest to INT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KEX | 20 | 344354 | 1 |
| SEB | 10 | 51591 | -2 |
| AUO | 10 | 56987 | -5 |
| PBI | 21 | 362364 | 2 |
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $204 million. That figure was $114 million in INT’s case. Pitney Bowes Inc. (NYSE:PBI) is the most popular stock in this table. On the other hand Seaboard Corporation (NYSEAMEX:SEB) is the least popular one with only 10 bullish hedge fund positions. World Fuel Services Corp (NYSE:INT) 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 with positive recent sentiment. In this regard PBI might be a better candidate to consider a long position in.
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