Should You Buy Cognizant Technology Solutions Corp (CTSH)?

As one would reasonably expect, key money managers have been driving this bullishness. Southpoint Capital Advisors, managed by John Smith Clark, established the biggest position in Cognizant Technology Solutions Corp (NASDAQ:CTSH). Southpoint Capital Advisors had $47.7 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also initiated a $35.8 million position during the quarter. The other funds with new positions in the stock are Jason Karp’s Tourbillon Capital Partners, Ric Dillon’s Diamond Hill Capital, and Clint Carlson’s Carlson Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Cognizant Technology Solutions Corp (NASDAQ:CTSH) but similarly valued. These stocks are Las Vegas Sands Corp. (NYSE:LVS), Anthem Inc (NYSE:ANTM), American Electric Power Company, Inc. (NYSE:AEP), and Carnival Corporation (NYSE:CCL). This group of stocks’ market valuations are closest to CTSH’s market valuation.

As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $1.32 billion. That figure was $1.35 billion in CTSH’s case. Anthem Inc (NYSE:ANTM) is the most popular stock in this table. On the other hand Carnival Corporation (NYSE:CCL) is the least popular one with only 27 bullish hedge fund positions. Cognizant Technology Solutions Corp (NASDAQ:CTSH) 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 ANTM might be a better candidate to consider a long position.