Is Canadian National Railway (USA) (CNI) A Good Stock To Buy?

Judging by the fact that Canadian National Railway (USA) (NYSE:CNI) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there is a sect of money managers that decided to sell off their entire stakes last quarter. It’s worth mentioning that Steve Cohen’s Point72 Asset Management sold off the largest stake of all the hedgies followed by Insider Monkey, comprising close to $26 million in stock, and Jonathan Barrett and Paul Segal’s Luminus Management was right behind this move, as the fund said goodbye to about $14.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 4 funds last quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Canadian National Railway (USA) (NYSE:CNI) but similarly valued. These stocks are General Dynamics Corporation (NYSE:GD), NextEra Energy, Inc. (NYSE:NEE), Infosys Ltd ADR (NYSE:INFY), and Netflix, Inc. (NASDAQ:NFLX). This group of stocks’ market values are similar to CNI’s market value.

As you can see these stocks had an average of 40.5 hedge funds with bullish positions and the average amount invested in these stocks was $3816 million. That figure was $1297 million in CNI’s case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand Infosys Ltd ADR (NYSE:INFY) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Canadian National Railway (USA) (NYSE:CNI) is even less popular than INFY. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.