FedEx Corporation (NYSE:FDX) has seen an increase in activity from the world’s largest hedge funds recently.
If you’d ask most traders, hedge funds are seen as unimportant, old financial vehicles of the past. While there are more than 8000 funds with their doors open today, we hone in on the masters of this club, close to 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by paying attention to their best investments, we have formulated a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as important, optimistic insider trading activity is a second way to parse down the marketplace. Obviously, there are many motivations for an executive to cut shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this strategy if piggybackers understand where to look (learn more here).
With all of this in mind, let’s take a gander at the latest action surrounding FedEx Corporation (NYSE:FDX).
How are hedge funds trading FedEx Corporation (NYSE:FDX)?
At year’s end, a total of 40 of the hedge funds we track were long in this stock, a change of 11% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.
According to our comprehensive database, Southeastern Asset Management, managed by Mason Hawkins, holds the largest position in FedEx Corporation (NYSE:FDX). Southeastern Asset Management has a $1.4946 billion position in the stock, comprising 6.5% of its 13F portfolio. The second largest stake is held by Edgar Wachenheim of Greenhaven Associates, with a $414 million position; 12.6% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Michael Larson’s Bill & Melinda Gates Foundation Trust, Bain Capital’s Brookside Capital and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Brookside Capital, managed by Bain Capital, established the most outsized position in FedEx Corporation (NYSE:FDX). Brookside Capital had 143.7 million invested in the company at the end of the quarter. Anthony Bozza’s Lakewood Capital Management also initiated a $26.5 million position during the quarter. The other funds with new positions in the stock are Kerr Neilson’s Platinum Asset Management, James Dondero’s Highland Capital Management, and Andrew Sandler’s Sandler Capital Management.
Insider trading activity in FedEx Corporation (NYSE:FDX)
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, FedEx Corporation (NYSE:FDX) has experienced 1 unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to FedEx Corporation (NYSE:FDX). These stocks are Hub Group Inc (NASDAQ:HUBG), UTi Worldwide Inc. (NASDAQ:UTIW), Expeditors International of Washington (NASDAQ:EXPD), C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), and United Parcel Service, Inc. (NYSE:UPS). This group of stocks are in the air delivery & freight services industry and their market caps match FDX’s market cap.