Is Cardinal Health Inc (CAH) A Good Stock To Buy?

Since Cardinal Health Inc (NYSE:CAH) has faced falling interest from hedge fund managers, it’s easy to see that there exists a select few funds that elected to cut their full holdings in the third quarter. Intriguingly, Samuel Isaly’s OrbiMed Advisors dropped the biggest investment of all the hedgies watched by Insider Monkey, totaling an estimated $13 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund cut about $4.8 million worth of CAH shares. These moves are important to note, as total hedge fund interest fell by 8 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Cardinal Health Inc (NYSE:CAH). These stocks are Edison International (NYSE:EIX), LinkedIn Corp (NYSE:LNKD), Archer Daniels Midland Company (NYSE:ADM), and Equity Residential (NYSE:EQR). This group of stocks’ market valuations are similar to CAH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EIX 19 640459 -1
LNKD 59 4838915 -7
ADM 24 676010 -2
EQR 20 794112 -5

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $1.74 billion. That figure was a modest $666 million in CAH’s case. LinkedIn Corp (NYSE:LNKD) is the most popular stock in this table. On the other hand Edison International (NYSE:EIX) is the least popular one with only 19 bullish hedge fund positions. Cardinal Health Inc (NYSE:CAH) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LNKD might be a better candidate to consider a long position in.

Disclosure: None