Do Hedge Funds See A Healthy Future For Cardinal Health, Inc. (CAH)?

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Due to the fact that Cardinal Health, Inc. (NYSE:CAH) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies that slashed their entire stakes heading into Q4. It’s worth mentioning that Roberto Mignone’s Bridger Management dumped the biggest investment of the 700 funds followed by Insider Monkey, totaling about $65.3 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $56.7 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to Cardinal Health, Inc. (NYSE:CAH). These stocks are Southwest Airlines Co. (NYSE:LUV), AFLAC Incorporated (NYSE:AFL), Nokia Corporation (ADR) (NYSE:NOK), and O’Reilly Automotive Inc (NASDAQ:ORLY). This group of stocks’ market values are similar to CAH’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LUV 54 2542264 4
AFL 28 768753 1
NOK 24 450622 1
ORLY 35 1516821 3

As you can see these stocks had an average of 35.25 hedge funds with bullish positions and the average amount invested in these stocks was $1.32 billion. That figure was $796 million in CAH’s case. Southwest Airlines Co. (NYSE:LUV) is the most popular stock in this table. On the other hand Nokia Corporation (ADR) (NYSE:NOK) is the least popular one with only 24 bullish hedge fund positions. Cardinal Health, Inc. (NYSE:CAH) 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 LUV might be a better candidate to consider a long position in.

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