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Hedge Funds Have Never Been This Bullish On Expeditors International of Washington (EXPD)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Expeditors International of Washington (NASDAQ:EXPD) based on that data and determine whether they were really smart about the stock.

Expeditors International of Washington (NASDAQ:EXPD) has experienced an increase in hedge fund interest recently. Expeditors International of Washington (NASDAQ:EXPD) was in 33 hedge funds’ portfolios at the end of June. The all time high for this statistics is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 31 hedge funds in our database with EXPD holdings at the end of March. Our calculations also showed that EXPD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. Cannabis stocks are roaring back in 2020, which is why we are also checking out this under-the-radar stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a peek at the fresh hedge fund action surrounding Expeditors International of Washington (NASDAQ:EXPD).

AQR CAPITAL MANAGEMENT

Cliff Asness of AQR Capital Management

How have hedgies been trading Expeditors International of Washington (NASDAQ:EXPD)?

At the end of the second quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EXPD over the last 20 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

Is EXPD A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the largest position in Expeditors International of Washington (NASDAQ:EXPD), worth close to $168.1 million, comprising 1% of its total 13F portfolio. On Select Equity Group’s heels is Cliff Asness of AQR Capital Management, with a $79.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions consist of  Renaissance Technologies, Noam Gottesman’s GLG Partners and Douglas Dossey and Arthur Young’s Tensile Capital. In terms of the portfolio weights assigned to each position Provenire Capital allocated the biggest weight to Expeditors International of Washington (NASDAQ:EXPD), around 4.52% of its 13F portfolio. Tensile Capital is also relatively very bullish on the stock, setting aside 2.38 percent of its 13F equity portfolio to EXPD.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Provenire Capital, managed by Anthony S. Daffer, established the most outsized position in Expeditors International of Washington (NASDAQ:EXPD). Provenire Capital had $4.9 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $4.1 million position during the quarter. The other funds with brand new EXPD positions are Jeffrey Talpins’s Element Capital Management, Parvinder Thiara’s Athanor Capital, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Expeditors International of Washington (NASDAQ:EXPD) but similarly valued. These stocks are Qorvo Inc (NASDAQ:QRVO), Etsy Inc (NASDAQ:ETSY), Genuine Parts Company (NYSE:GPC), Sarepta Therapeutics Inc (NASDAQ:SRPT), Hewlett Packard Enterprise Company (NYSE:HPE), Grifols SA (NASDAQ:GRFS), and Nucor Corporation (NYSE:NUE). This group of stocks’ market valuations match EXPD’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
QRVO 51 1608774 12
ETSY 43 1727421 5
GPC 20 144284 -2
SRPT 39 1148135 6
HPE 31 693633 2
GRFS 21 583023 -2
NUE 26 115702 0
Average 33 860139 3

View table here if you experience formatting issues.

As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $860 million. That figure was $443 million in EXPD’s case. Qorvo Inc (NASDAQ:QRVO) is the most popular stock in this table. On the other hand Genuine Parts Company (NYSE:GPC) is the least popular one with only 20 bullish hedge fund positions. Expeditors International of Washington (NASDAQ:EXPD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EXPD is 58. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 33% in 2020 through the end of August and beat the market by 23.2 percentage points. A small number of hedge funds were also right about betting on EXPD, though not to the same extent, as the stock returned 16.2% during the first two months of Q3 and outperformed the market.

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Disclosure: None. This article was originally published at Insider Monkey.