Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the third quarter. Among them, Valeant and Micron ranked among the top 30 picks and both lost around 20%. Citigroup, which was the third most popular stock, lost 10% amid uncertainty regarding the interest rates. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Con-way Inc (NYSE:CNW) was in 23 hedge funds’ portfolios at the end of the third quarter of 2015. Con-way Inc (NYSE:CNW) shareholders have witnessed an increase in enthusiasm from smart money lately. There were 19 hedge funds in our database with Con-way Inc (NYSE:CNW) positions at the end of the previous quarter. 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 Teck Resources Ltd (USA) (NYSE:TCK), Telephone & Data Systems, Inc. (NYSE:TDS), and Ascena Retail Group Inc (NASDAQ:ASNA) to gather more data points.
Follow Con-Way Inc. (NYSE:CNW)
Follow Con-Way Inc. (NYSE:CNW)
To the average investor, there are several signals that stock market investors employ to grade their holdings. A couple of the most under-the-radar signals are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can outclass the broader indices by a very impressive amount (see the details here).
Keeping this in mind, let’s review the fresh action surrounding Con-way Inc (NYSE:CNW).
How have hedgies been trading Con-way Inc (NYSE:CNW)?
At the end of Q3, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 21% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Pine River Capital Management, managed by Brian Taylor, holds the largest position in Con-way Inc (NYSE:CNW). Pine River Capital Management has a $123.4 million position in the stock, comprising 1.9% of its 13F portfolio. The second most bullish fund manager is Magnetar Capital, managed by Alec Litowitz and Ross Laser, which holds a $98.9 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Some other peers that hold long positions include John Orrico’s Water Island Capital, Paul Glazer’s Glazer Capital and Robert Emil Zoellner’s Alpine Associates.
As industrywide interest jumped, key money managers were leading the bulls’ herd. These funds were among the new Con-way Inc (NYSE:CNW) investors: Water Island Capital, Glazer Capital, and Alpine Associates.
Let’s check out hedge fund activity in other stocks similar to Con-way Inc (NYSE:CNW). We will take a look at Teck Resources Ltd (USA) (NYSE:TCK), Telephone & Data Systems, Inc. (NYSE:TDS), Ascena Retail Group Inc (NASDAQ:ASNA), and Crane Co. (NYSE:CR). All of these stocks’ market caps are closest to Con-way Inc (NYSE:CNW)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TCK | 19 | 47305 | 4 |
| TDS | 24 | 287537 | -1 |
| ASNA | 23 | 472622 | -2 |
| CR | 21 | 267772 | -2 |
As you can see, these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $269 million. That figure was $631 million in Con-way Inc (NYSE:CNW)’s case. Telephone & Data Systems, Inc. (NYSE:TDS) is the most popular stock in this table. On the other hand, Teck Resources Ltd (USA) (NYSE:TCK) is the least popular one with only 19 bullish hedge fund positions. Con-way Inc (NYSE:CNW) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Telephone & Data Systems, Inc. (NYSE:TDS) might be a better candidate to consider a long position.
