Is FLT A Good Stock To Buy Now?

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 third 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 FleetCor Technologies, Inc. (NYSE:FLT) based on that data.

Is FLT a good stock to buy now? FleetCor Technologies, Inc. (NYSE:FLT) has experienced a decrease in activity from the world’s largest hedge funds in recent months. FleetCor Technologies, Inc. (NYSE:FLT) was in 40 hedge funds’ portfolios at the end of September. 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 Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of years past. While there are over 8000 funds trading at present, We hone in on the crème de la crème of this group, around 850 funds. These money managers preside over most of the hedge fund industry’s total capital, and by tailing their best investments, Insider Monkey has discovered a few investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

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At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 look at the key hedge fund action regarding FleetCor Technologies, Inc. (NYSE:FLT).

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

At third quarter’s end, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FLT over the last 21 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Chase Coleman’s Tiger Global Management LLC has the biggest position in FleetCor Technologies, Inc. (NYSE:FLT), worth close to $308.4 million, comprising 0.9% of its total 13F portfolio. Sitting at the No. 2 spot is Robert Pitts of Steadfast Capital Management, with a $223.1 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, Lee Ainslie’s Maverick Capital and Andreas Halvorsen’s Viking Global. In terms of the portfolio weights assigned to each position Incline Global Management allocated the biggest weight to FleetCor Technologies, Inc. (NYSE:FLT), around 6.81% of its 13F portfolio. Berylson Capital Partners is also relatively very bullish on the stock, earmarking 5.47 percent of its 13F equity portfolio to FLT.

Seeing as FleetCor Technologies, Inc. (NYSE:FLT) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few fund managers that elected to cut their positions entirely last quarter. Intriguingly, Gabriel Plotkin’s Melvin Capital Management cut the biggest stake of the “upper crust” of funds followed by Insider Monkey, comprising about $344.9 million in stock, and Daniel Sundheim’s D1 Capital Partners was right behind this move, as the fund said goodbye to about $77.6 million worth. These transactions are important to note, as total hedge fund interest dropped by 13 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to FleetCor Technologies, Inc. (NYSE:FLT). These stocks are China Unicom (Hong Kong) Limited (NYSE:CHU), AmerisourceBergen Corporation (NYSE:ABC), Simon Property Group, Inc (NYSE:SPG), Entergy Corporation (NYSE:ETR), Immunomedics, Inc. (NASDAQ:IMMU), Incyte Corporation (NASDAQ:INCY), and Ameren Corporation (NYSE:AEE). This group of stocks’ market values are closest to FLT’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHU 6 49582 -2
ABC 45 477155 5
SPG 25 313077 -2
ETR 27 786556 -5
IMMU 81 6943238 33
INCY 35 3821456 6
AEE 20 521323 1
Average 34.1 1844627 5.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.1 hedge funds with bullish positions and the average amount invested in these stocks was $1845 million. That figure was $1498 million in FLT’s case. Immunomedics, Inc. (NASDAQ:IMMU) is the most popular stock in this table. On the other hand China Unicom (Hong Kong) Limited (NYSE:CHU) is the least popular one with only 6 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 34.7. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on FLT as the stock returned 13.9% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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