Where Do Hedge Funds Stand On Waste Connections, Inc. (WCN)?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Waste Connections, Inc. (NYSE:WCN).

Waste Connections, Inc. (NYSE:WCN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 32 hedge funds’ portfolios at the end of September. Our calculations also showed that WCN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare WCN to other stocks including CBRE Group, Inc. (NYSE:CBRE), Affirm Holdings, Inc. (NASDAQ:AFRM), and Verisk Analytics, Inc. (NASDAQ:VRSK) to get a better sense of its popularity.

Jim Simons of Renaissance Technologies

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 analyze the fresh hedge fund action surrounding Waste Connections, Inc. (NYSE:WCN).

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

Heading into the fourth quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards WCN over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Among these funds, Citadel Investment Group held the most valuable stake in Waste Connections, Inc. (NYSE:WCN), which was worth $132.8 million at the end of the third quarter. On the second spot was Echo Street Capital Management which amassed $120.7 million worth of shares. Renaissance Technologies, Junto Capital Management, and D E Shaw 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 Galibier Capital Management allocated the biggest weight to Waste Connections, Inc. (NYSE:WCN), around 7.04% of its 13F portfolio. Bishop Rock Capital is also relatively very bullish on the stock, designating 5.25 percent of its 13F equity portfolio to WCN.

Since Waste Connections, Inc. (NYSE:WCN) has witnessed a decline in interest from the smart money, it’s easy to see that there was a specific group of funds that decided to sell off their positions entirely heading into Q4. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dropped the biggest stake of the 750 funds watched by Insider Monkey, totaling close to $3.4 million in stock. Mark Coe’s fund, Coe Capital Management, also said goodbye to its stock, about $2.7 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Waste Connections, Inc. (NYSE:WCN). These stocks are CBRE Group, Inc. (NYSE:CBRE), Affirm Holdings, Inc. (NASDAQ:AFRM), Verisk Analytics, Inc. (NASDAQ:VRSK), EPAM Systems Inc (NYSE:EPAM), Nasdaq, Inc. (NASDAQ:NDAQ), Cummins Inc. (NYSE:CMI), and Barrick Gold Corporation (NYSE:GOLD). All of these stocks’ market caps are similar to WCN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.6 hedge funds with bullish positions and the average amount invested in these stocks was $1311 million. That figure was $786 million in WCN’s case. EPAM Systems Inc (NYSE:EPAM) is the most popular stock in this table. On the other hand Nasdaq, Inc. (NASDAQ:NDAQ) is the least popular one with only 21 bullish hedge fund positions. Waste Connections, Inc. (NYSE:WCN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WCN is 55.8. 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. This is a slightly negative signal and 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately WCN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); WCN investors were disappointed as the stock returned 5.8% since the end of September (through 11/30) 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 most of these stocks already outperformed the market in 2021.

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

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