Should You Buy Kansas City Southern (KSU)?

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Seeing as Kansas City Southern (NYSE:KSU) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedge funds that decided to sell off their entire stakes last quarter. At the top of the heap, Keith Meister’s Corvex Capital dumped the largest position of the 700 funds monitored by Insider Monkey, worth about $55.4 million in stock, and Alexander Mitchell’s Scopus Asset Management was right behind this move, as the fund cut about $29.7 million worth of shares. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Kansas City Southern (NYSE:KSU). These stocks are Restaurant Brands International Inc (NYSE:QSR), LKQ Corporation (NASDAQ:LKQ), Discovery Communications Inc. (NASDAQ:DISCK), and Celanese Corporation (NYSE:CE). This group of stocks’ market valuations are closest to KSU’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
QSR 32 3143758 1
LKQ 32 668630 2
DISCK 21 280090 -3
CE 31 817436 -2

As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $1.23 billion. That figure was $907 million in KSU’s case. Restaurant Brands International Inc (NYSE:QSR) is the most popular stock in this table with 32 funds holding shares. On the other hand Discovery Communications Inc. (NASDAQ:DISCK) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Kansas City Southern (NYSE:KSU) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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Disclosure: None

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