Is Expeditors International of Washington (EXPD) A Good Stock To Buy?

There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Expeditors International of Washington (NASDAQ:EXPD).

Is Expeditors International of Washington (NASDAQ:EXPD) going to take off soon? Investors who are in the know are taking a bearish view. The number of bullish hedge fund bets shrunk by 6 lately. EXPD was in 25 hedge funds’ portfolios at the end of the third quarter of 2015. There were 31 hedge funds in our database with EXPD holdings at the end of the previous quarter. At the end of this article we will also compare EXPD to other stocks, including Cheniere Energy Partners LP (NYSEAMEX:CQP), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), and Digital Realty Trust, Inc. (NYSE:DLR) to get a better sense of its popularity.

Today there are a multitude of tools stock traders use to evaluate publicly traded companies. A pair of the most underrated tools are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat their index-focused peers by a very impressive margin (see the details here).

Now, let’s take a glance at the latest action encompassing Expeditors International of Washington (NASDAQ:EXPD).

Hedge fund activity in Expeditors International of Washington (NASDAQ:EXPD)

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 19% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the most valuable position in Expeditors International of Washington (NASDAQ:EXPD), worth close to $247.6 million, corresponding to 2.4% of its total 13F portfolio. The second most bullish fund manager is International Value Advisers, managed by Charles de Vaulx, which holds a $219.6 million position; 5.9% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise Joel Greenblatt’s Gotham Asset Management, Douglas Dossey and Arthur Young’s Tensile Capital and Chuck Royce’s Royce & Associates.

Seeing as Expeditors International of Washington (NASDAQ:EXPD) has faced a declination in interest from hedge fund managers, it’s easy to see that there were a few funds that slashed their entire stakes by the end of the third quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest stake of all the hedgies tracked by Insider Monkey, totaling about $2.3 million in stock, and John W. Rogers’s Ariel Investments was right behind this move, as the fund sold off about $1.7 million worth of shares. These transactions are interesting, as aggregate hedge fund interest was cut by 6 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Expeditors International of Washington (NASDAQ:EXPD). We will take a look at Cheniere Energy Partners LP (NYSEAMEX:CQP), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), Digital Realty Trust, Inc. (NYSE:DLR), and CNH Industrial NV (NYSE:CNHI). This group of stocks’ market values are closest to EXPD’s market value.

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 $682 million. That figure was $731 million in EXPD’s case. Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is the most popular stock in this table, whereas Cheniere Energy Partners LP (NYSEAMEX:CQP) is at the other end of the specter with only 8 bullish hedge fund positions. Expeditors International of Washington (NASDAQ:EXPD) is not the most popular stock in this group, but hedge fund interest is still above average. While this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CTRP might be a better candidate to consider a long position.