Should I Avoid Expeditors International of Washington (EXPD)?

In this article we will analyze whether Expeditors International of Washington (NASDAQ:EXPD) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Expeditors International of Washington (NASDAQ:EXPD) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 33. EXPD investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 25 hedge funds in our database with EXPD holdings at the end of December. Our calculations also showed that EXPD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you’d ask most traders, hedge funds are seen as unimportant, outdated financial tools of the past. While there are over 8000 funds trading today, Our experts choose to focus on the elite of this group, approximately 850 funds. Most estimates calculate that this group of people control the majority of the smart money’s total capital, and by watching their first-class investments, Insider Monkey has identified many investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla 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. Now we’re going to view the key hedge fund action surrounding Expeditors International of Washington (NASDAQ:EXPD).

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

At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from one quarter earlier. On the other hand, there were a total of 31 hedge funds with a bullish position in EXPD a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is EXPD A Good Stock To Buy?

More specifically, Cedar Rock Capital was the largest shareholder of Expeditors International of Washington (NASDAQ:EXPD), with a stake worth $173.4 million reported as of the end of March. Trailing Cedar Rock Capital was AQR Capital Management, which amassed a stake valued at $158.7 million. Select Equity Group, GLG Partners, and Adage Capital Management 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 Cedar Rock Capital allocated the biggest weight to Expeditors International of Washington (NASDAQ:EXPD), around 3.87% of its 13F portfolio. Arjuna Capital is also relatively very bullish on the stock, earmarking 1.03 percent of its 13F equity portfolio to EXPD.

Seeing as Expeditors International of Washington (NASDAQ:EXPD) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that decided to sell off their entire stakes in the first quarter. It’s worth mentioning that  Renaissance Technologies sold off the largest position of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $10.9 million in stock. David Harding’s fund, Winton Capital Management, also cut its stock, about $3.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the first quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Expeditors International of Washington (NASDAQ:EXPD) but similarly valued. We will take a look at Rogers Communications Inc. (NYSE:RCI), Invitation Homes Inc. (NYSE:INVH), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), Catalent Inc (NYSE:CTLT), The AES Corporation (NYSE:AES), Incyte Corporation (NASDAQ:INCY), and Cardinal Health, Inc. (NYSE:CAH). This group of stocks’ market valuations match EXPD’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RCI 18 289168 3
INVH 28 1174443 1
SSNC 54 2671021 5
CTLT 29 1016499 -6
AES 51 1541608 13
INCY 32 3851519 -5
CAH 39 967855 -10
Average 35.9 1644588 0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.9 hedge funds with bullish positions and the average amount invested in these stocks was $1645 million. That figure was $440 million in EXPD’s case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Rogers Communications Inc. (NYSE:RCI) is the least popular one with only 18 bullish hedge fund positions. Expeditors International of Washington (NASDAQ:EXPD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EXPD is 24.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on EXPD as the stock returned 18.3% since the end of the first quarter (through 7/16) and outperformed the market by an even larger margin.

Follow Expeditors International Of Washington Inc (NASDAQ:EXPD)

Suggested Articles:

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