Does CIT Group Inc. (NYSE:CIT) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
CIT Group Inc. (NYSE:CIT) shareholders have witnessed a decrease in support from the world’s most elite money managers of late. At the end of this article, we will also compare CIT Group Inc. (NYSE:CIT) to other stocks including Westlake Chemical Corporation (NYSE:WLK), Garmin Ltd. (NASDAQ:GRMN), and Spirit AeroSystems Holdings, Inc. (NYSE:SPR) to get a better sense of its popularity.
In today’s marketplace there are many methods investors can use to value publicly traded companies. Two of the most useful methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can outclass the broader indices by a healthy margin (see the details here).
Keeping this in mind, let’s take a gander at the key action surrounding CIT Group Inc. (NYSE:CIT).
How are hedge funds trading CIT Group Inc. (NYSE:CIT)?
At the end of Q3, a total of 28 of the hedge funds tracked by Insider Monkey were long in this stock, a decline of 15% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the hedgies followed by Insider Monkey, John Paulson’s Paulson & Co had the most valuable position in CIT Group Inc. (NYSE:CIT), worth close to $277 million, amounting to 1.4% of its total 13F portfolio. Coming in second was Robert Rodriguez and Steven Romick of First Pacific Advisors LLC, with a $213 million position; the fund had 1.8% of its 13F portfolio invested in the stock. Remaining hedgies that were bullish include Lee Ainslie’s Maverick Capital, Ken Griffin’s Citadel Investment Group and George Soros’s Soros Fund Management.
Judging by the fact that CIT Group Inc. (NYSE:CIT) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of money managers that slashed their full holdings in the third quarter. Intriguingly, Keith Meister’s Corvex Capital sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, worth an estimated $70.6 million in stock, and Larry Foley and Paul Farrell of Bronson Point Partners was right behind this move, as the fund sold off about $41.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by five funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as CIT Group Inc. (NYSE:CIT) but similarly valued. These stocks are Westlake Chemical Corporation (NYSE:WLK), Garmin Ltd. (NASDAQ:GRMN), Spirit AeroSystems Holdings, Inc. (NYSE:SPR), and Envision Healthcare Holdings Inc (NYSE:EVHC). This group of stocks’ market values are closest to CIT Group Inc. (NYSE:CIT)’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1.2 billion, slightly lower than the $1.28 billion that hedge funds from our database had invested in CIT Group Inc. (NYSE:CIT) at the end of September. Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is the most popular stock in this table. On the other hand, Garmin Ltd. (NASDAQ:GRMN) is the least popular one with only 19 bullish hedge fund positions. However, in CIT Group’s case the interest is much below average, which could suggest that you may want to hold off buying shares at the moment. In any case, other stocks from the table might represent a better opportunity to invest in.