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 XPO Logistics Inc (NYSE:XPO) and determine whether the smart money was really smart about this stock.
Is XPO Logistics Inc (NYSE:XPO) a buy right now? Investors who are in the know were becoming less hopeful. The number of bullish hedge fund bets retreated by 8 recently. XPO Logistics Inc (NYSE:XPO) was in 49 hedge funds’ portfolios at the end of September. The all time high for this statistic is 57. Our calculations also showed that XPO 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 view the fresh hedge fund action regarding XPO Logistics Inc (NYSE:XPO).
Dmitry Balyasny of Balyasny Asset Management
Do Hedge Funds Think XPO Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. On the other hand, there were a total of 39 hedge funds with a bullish position in XPO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Orbis Investment Management was the largest shareholder of XPO Logistics Inc (NYSE:XPO), with a stake worth $872.7 million reported as of the end of September. Trailing Orbis Investment Management was MFN Partners, which amassed a stake valued at $284.5 million. Empyrean Capital Partners, Citadel Investment Group, and Balyasny Asset Management 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 MFN Partners allocated the biggest weight to XPO Logistics Inc (NYSE:XPO), around 13.04% of its 13F portfolio. Lansing Management is also relatively very bullish on the stock, designating 8.3 percent of its 13F equity portfolio to XPO.
Because XPO Logistics Inc (NYSE:XPO) has experienced declining sentiment from hedge fund managers, we can see that there is a sect of hedgies that slashed their full holdings last quarter. At the top of the heap, Andrew Wellington and Jeff Keswin’s Lyrical Asset Management dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, valued at close to $392.4 million in stock. Zachary Sternberg and Benjamin Stein’s fund, Spruce House Investment Management, also cut its stock, about $69.9 million worth. These transactions are interesting, as total hedge fund interest fell by 8 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to XPO Logistics Inc (NYSE:XPO). These stocks are Tempur Sealy International Inc. (NYSE:TPX), Concentrix Corporation (NASDAQ:CNXC), AECOM (NYSE:ACM), Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN), Algonquin Power & Utilities Corp. (NYSE:AQN), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), and Sunrun Inc (NASDAQ:RUN). All of these stocks’ market caps are closest to XPO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TPX | 37 | 1299293 | 2 |
| CNXC | 21 | 586853 | 0 |
| ACM | 39 | 783809 | 7 |
| BHVN | 33 | 1063983 | 6 |
| AQN | 15 | 152646 | -9 |
| NBIX | 31 | 980578 | -1 |
| RUN | 37 | 1677910 | -8 |
| Average | 30.4 | 935010 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.4 hedge funds with bullish positions and the average amount invested in these stocks was $935 million. That figure was $1834 million in XPO’s case. AECOM (NYSE:ACM) is the most popular stock in this table. On the other hand Algonquin Power & Utilities Corp. (NYSE:AQN) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks XPO Logistics Inc (NYSE:XPO) is more popular among hedge funds. Our overall hedge fund sentiment score for XPO is 72.8. 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. Unfortunately, XPO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on XPO were disappointed as the stock returned -16.9% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Xpo Inc. (NYSE:XPO)
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Disclosure: None. This article was originally published at Insider Monkey.
