Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards FedEx Corporation (NYSE:FDX) at the end of the third quarter and determine whether the smart money was really smart about this stock.
FedEx Corporation (NYSE:FDX) has seen a decrease in hedge fund sentiment recently. FedEx Corporation (NYSE:FDX) was in 49 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 71. There were 61 hedge funds in our database with FDX positions at the end of the second quarter. Our calculations also showed that FDX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla 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. Now let’s take a gander at the fresh hedge fund action regarding FedEx Corporation (NYSE:FDX).
Mason Hawkins of Southeastern Asset Management
Do Hedge Funds Think FDX Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FDX over the last 25 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group has the most valuable call position in FedEx Corporation (NYSE:FDX), worth close to $569.1 million, amounting to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Bill & Melinda Gates Foundation Trust, led by Michael Larson, holding a $327.6 million position; 1.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions comprise Mason Hawkins’s Southeastern Asset Management, D. E. Shaw’s D E Shaw and Renaissance Technologies. In terms of the portfolio weights assigned to each position 12th Street Asset Management allocated the biggest weight to FedEx Corporation (NYSE:FDX), around 6.09% of its 13F portfolio. Trellus Management Company is also relatively very bullish on the stock, setting aside 4.79 percent of its 13F equity portfolio to FDX.
Judging by the fact that FedEx Corporation (NYSE:FDX) has witnessed bearish sentiment from the smart money, it’s safe to say that there exists a select few funds that elected to cut their full holdings by the end of the third quarter. It’s worth mentioning that Jack Woodruff’s Candlestick Capital Management cut the largest investment of the 750 funds tracked by Insider Monkey, worth an estimated $74.6 million in call options, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund dumped about $58.9 million worth. These moves are interesting, as aggregate hedge fund interest fell by 12 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as FedEx Corporation (NYSE:FDX) but similarly valued. We will take a look at América Móvil, S.A.B. de C.V. (NYSE:AMOV), Northrop Grumman Corporation (NYSE:NOC), NetEase, Inc (NASDAQ:NTES), Air Products & Chemicals, Inc. (NYSE:APD), Ford Motor Company (NYSE:F), ING Groep N.V. (NYSE:ING), and Twilio Inc. (NYSE:TWLO). All of these stocks’ market caps match FDX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMOV | 1 | 300 | 0 |
| NOC | 29 | 910523 | -13 |
| NTES | 32 | 2326768 | -11 |
| APD | 32 | 528730 | -8 |
| F | 51 | 1642491 | -4 |
| ING | 8 | 693351 | -1 |
| TWLO | 96 | 6369513 | -2 |
| Average | 35.6 | 1781668 | -5.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.6 hedge funds with bullish positions and the average amount invested in these stocks was $1782 million. That figure was $1682 million in FDX’s case. Twilio Inc. (NYSE:TWLO) is the most popular stock in this table. On the other hand América Móvil, S.A.B. de C.V. (NYSE:AMOV) is the least popular one with only 1 bullish hedge fund positions. FedEx Corporation (NYSE:FDX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FDX is 39. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on FDX as the stock returned 12.5% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Fedex Corp (NYSE:FDX)
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Disclosure: None. This article was originally published at Insider Monkey.
