Is Waste Connections, Inc. (WCN) A Good Stock To Buy?

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As industrywide interest jumped, key hedge funds have jumped into Waste Connections, Inc. (NYSE:WCN) headfirst. Gotham Asset Management, managed by Joel Greenblatt, initiated the largest position in Waste Connections, Inc. (NYSE:WCN). Gotham Asset Management had $4 million invested in the company at the end of the quarter. Robert Vollero and Gentry T. Beach’s Vollero Beach Capital Partners also initiated a $3.8 million position during the quarter. The other funds with brand new WCN positions are Israel Englander’s Millennium Management, Greg Poole’s Echo Street Capital Management, and Ray Dalio’s Bridgewater Associates.

Let’s check out hedge fund activity in other stocks similar to Waste Connections, Inc. (NYSE:WCN). These stocks are Brookfield Infrastructure Partners L.P. (NYSE:BIP), Axalta Coating Systems Ltd (NYSE:AXTA), YPF SA (ADR) (NYSE:YPF), and STMicroelectronics N.V. (ADR) (NYSE:STM). This group of stocks’ market valuations match WCN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BIP 12 25739 4
AXTA 44 1786793 6
YPF 32 634457 -2
STM 6 6900 1

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $613 million, as compared to $324 million in WCN’s case. Axalta Coating Systems Ltd (NYSE:AXTA) is the most popular stock in this table. On the other hand STMicroelectronics N.V. (ADR) (NYSE:STM) is the least popular one with only six 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AXTA might be a better candidate to consider a long position.

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