Is Computer Sciences Corporation (CSC) A Good Stock To Buy?

Judging by the fact that Computer Sciences Corporation (NYSE:CSC) has experienced a decline in interest from the smart money, we can see that there exists a select few hedge funds that elected to cut their entire stakes heading into fourth quarter. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group said goodbye to the biggest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $52.3 million in call options.. Glenn Russell Dubin’s fund, Highbridge Capital Management, also dumped its call options, about $12.6 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Computer Sciences Corporation (NYSE:CSC) but similarly valued. These stocks are CPFL Energia S.A. (ADR) (NYSE:CPL), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Leggett & Platt, Inc. (NYSE:LEG), and Gildan Activewear Inc (USA) (NYSE:GIL). All of these stocks’ market caps are closest to CSC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CPL 5 12178 1
VRX 58 2814175 -2
LEG 21 123384 6
GIL 10 84775 -3

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $759 million. That figure was $1.82 billion in CSC’s case. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is the most popular stock in this table. On the other hand CPFL Energia S.A. (ADR) (NYSE:CPL) is the least popular one with only 5 bullish hedge fund positions. Computer Sciences Corporation (NYSE:CSC) is not the most popular stock in this group but hedge fund interest is still above average. Valeant which was a large-cap stock last year, isn’t really an appropriate comparison. Like they were stuck in SunEdison last year, a bunch of hedge funds are now stuck in Valeant. That’s why we think CSC is really a popular hedge fund stock and deserves a closer look.

Disclosure: None