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Is CACI International Inc (CACI) A Good Stock To Buy?

We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of CACI International Inc (NYSE:CACI) based on that data.

Is CACI International Inc (NYSE:CACI) worth your attention right now? The smart money is in a bearish mood. The number of bullish hedge fund positions retreated by 5 recently. Our calculations also showed that CACI isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

AQR CAPITAL MANAGEMENT

We’re going to take a peek at the key hedge fund action surrounding CACI International Inc (NYSE:CACI).

Hedge fund activity in CACI International Inc (NYSE:CACI)

At Q1’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -28% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CACI over the last 15 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CACI_jun2019

The largest stake in CACI International Inc (NYSE:CACI) was held by Horizon Asset Management, which reported holding $54.5 million worth of stock at the end of March. It was followed by Adage Capital Management with a $26.2 million position. Other investors bullish on the company included GLG Partners, AQR Capital Management, and Citadel Investment Group.

Due to the fact that CACI International Inc (NYSE:CACI) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers who sold off their full holdings in the third quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies said goodbye to the biggest position of the 700 funds monitored by Insider Monkey, comprising close to $15.1 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund cut about $1.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 5 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks similar to CACI International Inc (NYSE:CACI). These stocks are LendingTree, Inc (NASDAQ:TREE), Virtu Financial Inc (NASDAQ:VIRT), Littelfuse, Inc. (NASDAQ:LFUS), and Kirby Corporation (NYSE:KEX). This group of stocks’ market caps are similar to CACI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TREE 17 82935 -4
VIRT 17 93239 0
LFUS 13 248928 -2
KEX 19 514257 3
Average 16.5 234840 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $235 million. That figure was $133 million in CACI’s case. Kirby Corporation (NYSE:KEX) is the most popular stock in this table. On the other hand Littelfuse, Inc. (NASDAQ:LFUS) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks CACI International Inc (NYSE:CACI) is even less popular than LFUS. Hedge funds clearly dropped the ball on CACI as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on CACI as the stock returned 13.3% during the same period and outperformed the market by an even larger margin.

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

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