We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 835 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about World Fuel Services Corporation (NYSE:INT) in this article.
World Fuel Services Corporation (NYSE:INT) shareholders have witnessed an increase in support from the world’s most elite money managers of late. Our calculations also showed that INT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In today’s marketplace there are many signals stock traders put to use to assess their holdings. Some of the most under-the-radar signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the market by a superb margin (see the details here).
Cliff Asness of AQR Capital Management
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the key hedge fund action surrounding World Fuel Services Corporation (NYSE:INT).
What have hedge funds been doing with World Fuel Services Corporation (NYSE:INT)?
At Q4’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in INT over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in World Fuel Services Corporation (NYSE:INT) was held by AQR Capital Management, which reported holding $99.4 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $39.2 million position. Other investors bullish on the company included Rubric Capital Management, Encompass Capital Advisors, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Rubric Capital Management allocated the biggest weight to World Fuel Services Corporation (NYSE:INT), around 2.37% of its 13F portfolio. AlphaOne Capital Partners is also relatively very bullish on the stock, earmarking 1.34 percent of its 13F equity portfolio to INT.
Consequently, key money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in World Fuel Services Corporation (NYSE:INT). Arrowstreet Capital had $9.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $8.4 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Michael Kharitonov and Jon David McAuliffe’s Voleon Capital, and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks similar to World Fuel Services Corporation (NYSE:INT). We will take a look at PolyOne Corporation (NYSE:POL), Allegiant Travel Company (NASDAQ:ALGT), International Bancshares Corp (NASDAQ:IBOC), and Red Rock Resorts, Inc. (NASDAQ:RRR). All of these stocks’ market caps are closest to INT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| POL | 24 | 265035 | 2 |
| ALGT | 24 | 618035 | 6 |
| IBOC | 20 | 195845 | 3 |
| RRR | 18 | 363869 | 1 |
| Average | 21.5 | 360696 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $361 million. That figure was $223 million in INT’s case. PolyOne Corporation (NYSE:POL) is the most popular stock in this table. On the other hand Red Rock Resorts, Inc. (NASDAQ:RRR) is the least popular one with only 18 bullish hedge fund positions. World Fuel Services Corporation (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 are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but beat the market by 5.5 percentage points. Unfortunately INT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on INT were disappointed as the stock returned -46.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
