Is FCN Stock A Buy or Sell?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of FTI Consulting, Inc. (NYSE:FCN) based on that data.

Is FCN stock a buy? FTI Consulting, Inc. (NYSE:FCN) has seen a decrease in hedge fund sentiment of late. FTI Consulting, Inc. (NYSE:FCN) was in 25 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 37. Our calculations also showed that FCN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to take a gander at the fresh hedge fund action encompassing FTI Consulting, Inc. (NYSE:FCN).

Do Hedge Funds Think FCN Is A Good Stock To Buy Now?

At fourth quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -32% from one quarter earlier. On the other hand, there were a total of 21 hedge funds with a bullish position in FCN a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

Among these funds, Greenvale Capital held the most valuable stake in FTI Consulting, Inc. (NYSE:FCN), which was worth $101.1 million at the end of the fourth quarter. On the second spot was Nitorum Capital which amassed $98.9 million worth of shares. Two Sigma Advisors, AQR Capital Management, and Bayberry Capital Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Greenvale Capital allocated the biggest weight to FTI Consulting, Inc. (NYSE:FCN), around 9.69% of its 13F portfolio. Bayberry Capital Partners is also relatively very bullish on the stock, setting aside 6.1 percent of its 13F equity portfolio to FCN.

Judging by the fact that FTI Consulting, Inc. (NYSE:FCN) has experienced a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few money managers who sold off their entire stakes last quarter. Interestingly, Ken Griffin’s Citadel Investment Group sold off the biggest stake of all the hedgies followed by Insider Monkey, valued at about $67.1 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dumped about $16.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 12 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to FTI Consulting, Inc. (NYSE:FCN). These stocks are Shell Midstream Partners LP (NYSE:SHLX), nVent Electric plc (NYSE:NVT), National Beverage Corp. (NASDAQ:FIZZ), Artisan Partners Asset Management Inc (NYSE:APAM), The Ensign Group, Inc. (NASDAQ:ENSG), Scientific Games Corp (NASDAQ:SGMS), and Root, Inc. (NASDAQ:ROOT). This group of stocks’ market caps are closest to FCN’s market cap.

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As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $345 million. That figure was $382 million in FCN’s case. nVent Electric plc (NYSE:NVT) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 7 bullish hedge fund positions. FTI Consulting, Inc. (NYSE:FCN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FCN is 52.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on FCN as the stock returned 30.1% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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