The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Cigna Corporation (NYSE:CI) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Cigna Corporation (NYSE:CI) investors should pay attention to a decrease in hedge fund interest in recent months. Cigna Corporation (NYSE:CI) was in 58 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 76. Our calculations also showed that CI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Larry Robbins of Glenview Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a glance at the key hedge fund action regarding Cigna Corporation (NYSE:CI).
Do Hedge Funds Think CI Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 58 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the second quarter of 2021. By comparison, 62 hedge funds held shares or bullish call options in CI a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Arrowstreet Capital held the most valuable stake in Cigna Corporation (NYSE:CI), which was worth $350.2 million at the end of the third quarter. On the second spot was BloombergSen which amassed $280.6 million worth of shares. Glenview Capital, Lyrical Asset Management, and Crake Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position BloombergSen allocated the biggest weight to Cigna Corporation (NYSE:CI), around 14.38% of its 13F portfolio. Solel Partners is also relatively very bullish on the stock, designating 12.14 percent of its 13F equity portfolio to CI.
Because Cigna Corporation (NYSE:CI) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds who were dropping their entire stakes in the third quarter. It’s worth mentioning that Robert Pitts’s Steadfast Capital Management cut the largest investment of all the hedgies tracked by Insider Monkey, worth close to $237.2 million in stock. Jeffrey Altman’s fund, Owl Creek Asset Management, also cut its stock, about $84.9 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 5 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Cigna Corporation (NYSE:CI). We will take a look at Westpac Banking Corporation (NYSE:WBK), Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR), CSX Corporation (NYSE:CSX), ABB Ltd (NYSE:ABB), BioNTech SE (NASDAQ:BNTX), Moody’s Corporation (NYSE:MCO), and The Southern Company (NYSE:SO). This group of stocks’ market values match CI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WBK | 6 | 34160 | 2 |
| PBR | 23 | 3004383 | -2 |
| CSX | 56 | 3915444 | 0 |
| ABB | 19 | 721684 | 4 |
| BNTX | 28 | 689029 | 8 |
| MCO | 58 | 15699733 | 14 |
| SO | 30 | 676309 | -7 |
| Average | 31.4 | 3534392 | 2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.4 hedge funds with bullish positions and the average amount invested in these stocks was $3534 million. That figure was $2302 million in CI’s case. Moody’s Corporation (NYSE:MCO) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. Cigna Corporation (NYSE:CI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CI is 72.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on CI as the stock returned 15.7% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Cigna Holding Co (NYSE:CI)
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Disclosure: None. This article was originally published at Insider Monkey.
