In this article we will take a look at whether hedge funds think FedEx Corporation (NYSE:FDX) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
FedEx Corporation (NYSE:FDX) was in 61 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 71. FDX has seen a decrease in enthusiasm from smart money lately. There were 63 hedge funds in our database with FDX positions at the end of the first quarter. Our calculations also showed that FDX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Scott Bessent of Key Square Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a glance at the latest hedge fund action encompassing FedEx Corporation (NYSE:FDX).
Do Hedge Funds Think FDX Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 61 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FDX over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in FedEx Corporation (NYSE:FDX) was held by Citadel Investment Group, which reported holding $463.2 million worth of stock at the end of June. It was followed by Bill & Melinda Gates Foundation Trust with a $445.6 million position. Other investors bullish on the company included Southeastern Asset Management, Citadel Investment Group, and Millennium Management. In terms of the portfolio weights assigned to each position 12th Street Asset Management allocated the biggest weight to FedEx Corporation (NYSE:FDX), around 7.81% of its 13F portfolio. Key Square Capital Management is also relatively very bullish on the stock, setting aside 5.49 percent of its 13F equity portfolio to FDX.
Because FedEx Corporation (NYSE:FDX) has witnessed falling interest from hedge fund managers, we can see that there is a sect of funds who were dropping their entire stakes by the end of the second quarter. At the top of the heap, Ken Heebner’s Capital Growth Management cut the biggest investment of the 750 funds followed by Insider Monkey, comprising about $29.8 million in stock. Brandon Haley’s fund, Holocene Advisors, also said goodbye to its stock, about $24.7 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks similar to FedEx Corporation (NYSE:FDX). We will take a look at The Bank of Nova Scotia (NYSE:BNS), Mercadolibre Inc (NASDAQ:MELI), NetEase, Inc (NASDAQ:NTES), CME Group Inc (NASDAQ:CME), Dell Technologies Inc. (NYSE:DELL), Duke Energy Corporation (NYSE:DUK), and Canadian National Railway Company (NYSE:CNI). This group of stocks’ market caps resemble FDX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BNS | 14 | 223095 | -5 |
| MELI | 74 | 4024188 | 5 |
| NTES | 43 | 3720524 | 11 |
| CME | 62 | 2649845 | 2 |
| DELL | 62 | 5601143 | 8 |
| DUK | 36 | 566143 | 2 |
| CNI | 40 | 5310284 | 4 |
| Average | 47.3 | 3156460 | 3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 47.3 hedge funds with bullish positions and the average amount invested in these stocks was $3156 million. That figure was $2170 million in FDX’s case. Mercadolibre Inc (NASDAQ:MELI) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 14 bullish hedge fund positions. FedEx Corporation (NYSE:FDX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FDX is 67.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately FDX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FDX were disappointed as the stock returned -23.9% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Fedex Corp (NYSE:FDX)
Follow Fedex Corp (NYSE:FDX)
Suggested Articles:
- Top 20 Japanese Companies
- 10 Best Augmented Reality Stocks to Buy Now
- 10 Best Paper Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
