Is CSX Corporation (CSX) a Good Buy?

CSX Corporation (NYSE:CSX) has seen an increase in enthusiasm from smart money in recent months. The factors contributing to such enthusiasm could be the recent announcements by the company. We should pay attention to this, because CSX Corporation (NYSE:CSX) recently reported encouraging quarterly earnings, beating analyst estimates by 7 cents a share, while announcing a dividend of $ 0.15 per share.

CSX Corporation (CSX)

In today’s marketplace, there are plenty of gauges shareholders can use to watch publicly traded companies. A duo of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outclass their index-focused peers by a solid margin (see just how much).

Just as beneficial, positive insider trading sentiment is another way to break down the investments you’re interested in. There are many reasons for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the valuable potential of this method if investors understand what to do (learn more here).

With all of this in mind, we’re going to take a gander at the recent action regarding CSX Corporation (NYSE:CSX).

Hedge fund activity in CSX Corporation (NYSE:CSX)

At the end of the fourth quarter, a total of 34 of the hedge funds we track held long positions in this stock, a change of 6% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in CSX Corporation (NYSE:CSX). Renaissance Technologies has a $72.8 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is John A. Levin of Levin Capital Strategies, with a $43.2 million position; 0.9% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Daniel Arbess’s Xerion, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.

As one would reasonably expect, key hedge funds have jumped into CSX Corporation (NYSE:CSX) headfirst. Renaissance Technologies, managed by Jim Simons, established the most outsized position in CSX Corporation (NYSE:CSX). Renaissance Technologies had 72.8 million invested in the company at the end of the quarter. John A. Levin’s Levin Capital Strategies also made a $43.2 million investment in the stock during the quarter. The following funds were also among the new CSX investors: Daniel Arbess’s Xerion, John Fichthorn’s Dialectic Capital Management, and Larry Foley and Paul Farrell’s Bronson Point Partners.

Insider trading activity in CSX Corporation (NYSE:CSX)

Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, CSX Corporation (NYSE:CSX) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to CSX Corporation (NYSE:CSX). These stocks are Union Pacific Corporation (NYSE:UNP), Kansas City Southern (NYSE:KSU), Canadian National Railway (USA) (NYSE:CNI), Canadian Pacific Railway Limited (USA) (NYSE:CP), and Norfolk Southern Corp. (NYSE:NSC). All of these stocks are in the railroads industry and their market caps resemble CSX’s market cap.