Is FleetCor (FLT) Stock A Buy or Sell?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of FleetCor Technologies, Inc. (NYSE:FLT).

Is FleetCor (FLT) stock a buy or sell? The smart money was getting more optimistic. The number of long hedge fund bets advanced by 4 lately. FleetCor Technologies, Inc. (NYSE:FLT) was in 44 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 60. Our calculations also showed that FLT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 40 hedge funds in our database with FLT holdings at the end of September.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Michael Gelband of ExodusPoint Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock that will deliver a 10x return. 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 homepage (or at the end of this article). Now let’s take a look at the latest hedge fund action encompassing FleetCor Technologies, Inc. (NYSE:FLT).

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

At fourth quarter’s end, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 44 hedge funds with a bullish position in FLT a year ago. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Among these funds, Viking Global held the most valuable stake in FleetCor Technologies, Inc. (NYSE:FLT), which was worth $619.3 million at the end of the fourth quarter. On the second spot was Maverick Capital which amassed $267.2 million worth of shares. Steadfast Capital Management, Palestra Capital Management, and Tiger Global Management LLC 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 Incline Global Management allocated the biggest weight to FleetCor Technologies, Inc. (NYSE:FLT), around 7.6% of its 13F portfolio. Banbury Partners is also relatively very bullish on the stock, earmarking 7.2 percent of its 13F equity portfolio to FLT.

Consequently, key hedge funds have been driving this bullishness. Renaissance Technologies, established the most outsized position in FleetCor Technologies, Inc. (NYSE:FLT). Renaissance Technologies had $20.4 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $6.6 million position during the quarter. The following funds were also among the new FLT investors: Victor Ho’s Yarra Square Partners, Allon Hellmann’s Full18 Capital, and Michael Gelband’s ExodusPoint Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as FleetCor Technologies, Inc. (NYSE:FLT) but similarly valued. These stocks are Coca-Cola European Partners plc (NYSE:CCEP), Viatris Inc. (NASDAQ:VTRS), MPLX LP (NYSE:MPLX), Deutsche Bank Aktiengesellschaft (NYSE:DB), Wayfair Inc (NYSE:W), Etsy Inc (NASDAQ:ETSY), and AvalonBay Communities Inc (NYSE:AVB). This group of stocks’ market caps are closest to FLT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CCEP 28 1003000 5
VTRS 67 2753638 19
MPLX 13 142057 -1
DB 16 1649538 1
W 40 2845135 0
ETSY 56 1963085 5
AVB 32 864498 3
Average 36 1602993 4.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $1603 million. That figure was $2030 million in FLT’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand MPLX LP (NYSE:MPLX) is the least popular one with only 13 bullish hedge fund positions. FleetCor Technologies, Inc. (NYSE:FLT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FLT is 59.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately FLT wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on FLT were disappointed as the stock returned 3% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Follow Fleetcor Technologies Inc (NYSE:FLT)

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