Is Covanta Holding Corp (CVA) Worthy of Your Portfolio?

We already know that not all hedge funds are bullish on the stock and some hedge funds actually got rid of their positions entirely. It’s worth mentioning that Martin D. Sass’ MD Sass got rid of the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling close to $9.3 million in stock. Eric Chen’s fund, Antipodean Advisors, also dumped its stock, about $3.3 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Covanta Holding Corp (NYSE:CVA) but similarly valued. We will take a look at EXACT Sciences Corporation (NASDAQ:EXAS), Universal Forest Products, Inc. (NASDAQ:UFPI), WPP PLC (ADR) (NASDAQ:WPPGY), and Evercore Partners Inc. (NYSE:EVR). This group of stocks’ market caps are similar to CVA’s market cap.

As you can see these stocks had an average of 19 funds with bullish positions and the average amount invested in these stocks was $163 million. That figure was $202 million in CVA’s case. EXACT Sciences Corporation (NASDAQ:EXAS) is the most popular stock in this table. On the other hand WPP PLC (ADR) (NASDAQ:WPPGY) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Covanta Holding Corp (NYSE:CVA) is even less popular than WPPGY. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: none