Where Do Hedge Funds Stand On FedEx Corporation (FDX)?

At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not FedEx Corporation (NYSE:FDX) makes for a good investment right now.

FedEx Corporation (NYSE:FDX) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 63 hedge funds’ portfolios at the end of March. Our calculations also showed that FDX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare FDX to other stocks including Zoetis Inc (NYSE:ZTS), Crown Castle International Corp. (REIT) (NYSE:CCI), and The PNC Financial Services Group Inc. (NYSE:PNC) to get a better sense of its popularity.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Mason Hawkins of Southeastern Asset Management

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Do Hedge Funds Think FDX Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 63 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FDX over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Bill & Melinda Gates Foundation Trust was the largest shareholder of FedEx Corporation (NYSE:FDX), with a stake worth $424.3 million reported as of the end of March. Trailing Bill & Melinda Gates Foundation Trust was Citadel Investment Group, which amassed a stake valued at $383.3 million. AQR Capital Management, Southeastern Asset Management, and Citadel Investment Group 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 12th Street Asset Management allocated the biggest weight to FedEx Corporation (NYSE:FDX), around 7.45% of its 13F portfolio. Stormborn Capital Management is also relatively very bullish on the stock, earmarking 5.51 percent of its 13F equity portfolio to FDX.

Seeing as FedEx Corporation (NYSE:FDX) has witnessed a decline in interest from hedge fund managers, we can see that there exists a select few funds who sold off their positions entirely last quarter. At the top of the heap, Principal Global Investors’s Columbus Circle Investors cut the largest investment of all the hedgies followed by Insider Monkey, worth an estimated $14 million in stock. Ryan Caldwell’s fund, Chiron Investment Management, also sold off its stock, about $13.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

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 Zoetis Inc (NYSE:ZTS), Crown Castle International Corp. (REIT) (NYSE:CCI), The PNC Financial Services Group Inc. (NYSE:PNC), Duke Energy Corporation (NYSE:DUK), Enbridge Inc (NYSE:ENB), Mercadolibre Inc (NASDAQ:MELI), and CME Group Inc (NASDAQ:CME). This group of stocks’ market caps are similar to FDX’s market cap.

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As you can see these stocks had an average of 46.4 hedge funds with bullish positions and the average amount invested in these stocks was $1987 million. That figure was $2264 million in FDX’s case. Mercadolibre Inc (NASDAQ:MELI) is the most popular stock in this table. On the other hand Enbridge Inc (NYSE:ENB) is the least popular one with only 22 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 75.2. 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. 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 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately FDX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FDX were disappointed as the stock returned 4.2% since the end of March (through 6/11) 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 many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.