The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded CSX Corporation (NYSE:CSX) and determine whether the smart money was really smart about this stock.
Hedge fund interest in CSX Corporation (NYSE:CSX) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that CSX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). 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 ABB Ltd (NYSE:ABB), BioNTech SE (NASDAQ:BNTX), and Moody’s Corporation (NYSE:MCO) to gather more data points.
John Overdeck of Two Sigma Advisors
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. With all of this in mind let’s take a peek at the latest hedge fund action regarding CSX Corporation (NYSE:CSX).
Do Hedge Funds Think CSX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 56 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CSX over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
More specifically, Soroban Capital Partners was the largest shareholder of CSX Corporation (NYSE:CSX), with a stake worth $1176.9 million reported as of the end of September. Trailing Soroban Capital Partners was Egerton Capital Limited, which amassed a stake valued at $989.3 million. Fisher Asset Management, Two Sigma Advisors, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Soroban Capital Partners allocated the biggest weight to CSX Corporation (NYSE:CSX), around 11.02% of its 13F portfolio. 11 Capital Partners is also relatively very bullish on the stock, designating 5.48 percent of its 13F equity portfolio to CSX.
Seeing as CSX Corporation (NYSE:CSX) has witnessed declining sentiment from the smart money, we can see that there is a sect of hedge funds that decided to sell off their full holdings in the third quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management cut the largest position of the 750 funds watched by Insider Monkey, totaling close to $28.5 million in stock, and Jos Shaver’s Electron Capital Partners was right behind this move, as the fund dropped about $26.9 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to CSX Corporation (NYSE:CSX). We will take a look at ABB Ltd (NYSE:ABB), BioNTech SE (NASDAQ:BNTX), Moody’s Corporation (NYSE:MCO), The Southern Company (NYSE:SO), ICICI Bank Limited (NYSE:IBN), Illinois Tool Works Inc. (NYSE:ITW), and Regeneron Pharmaceuticals Inc (NASDAQ:REGN). This group of stocks’ market values are similar to CSX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABB | 19 | 721684 | 4 |
| BNTX | 28 | 689029 | 8 |
| MCO | 58 | 15699733 | 14 |
| SO | 30 | 676309 | -7 |
| IBN | 28 | 2621460 | 0 |
| ITW | 39 | 422271 | -6 |
| REGN | 44 | 1318026 | -4 |
| Average | 35.1 | 3164073 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.1 hedge funds with bullish positions and the average amount invested in these stocks was $3164 million. That figure was $3915 million in CSX’s case. Moody’s Corporation (NYSE:MCO) is the most popular stock in this table. On the other hand ABB Ltd (NYSE:ABB) is the least popular one with only 19 bullish hedge fund positions. CSX Corporation (NYSE:CSX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CSX is 79.1. 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 CSX as the stock returned 15.4% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
