Should You Buy Kansas City Southern (KSU)?

As aggregate interest increased, specific money managers have been driving this bullishness. Sachem Head Capital, managed by Scott Ferguson, created the largest position in Kansas City Southern (NYSE:KSU). Sachem Head Capital had $137.7 million invested in the company at the end of the quarter. Sharlyn C. Heslam’s Stockbridge Partners also made a $60.6 million investment in the stock during the quarter. The following funds were also among the new KSU investors: J Kevin Kenny Jr’s Emerging Sovereign Group, Jason Karp’s Tourbillon Capital Partners, and Daniel S. Och’s OZ Management.

Let’s check out hedge fund activity in other stocks similar to Kansas City Southern (NYSE:KSU). These stocks are Foot Locker, Inc. (NYSE:FL), H&R Block, Inc. (NYSE:HRB), CGI Group Inc. (USA) (NYSE:GIB), and Autodesk, Inc. (NASDAQ:ADSK). All of these stocks’ market caps are similar to Kansas City Southern (NYSE:KSU)’s market cap.

As you can see, these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $984 million. That figure was $1.45 billion in Kansas City Southern (NYSE:KSU)’s case. H&R Block, Inc. (NYSE:HRB) is the most popular stock in this table. On the other hand, CGI Group Inc. (USA) (NYSE:GIB) is the least popular one with only 11 bullish hedge fund positions. Kansas City Southern (NYSE:KSU) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, H&R Block, Inc. (NYSE:HRB) might be a better candidate to consider a long position.