In this article, we take a look at the five stocks billionaire Jeffrey Talpins was selling in Q2. If you want to find out about the hedge fund and the returns delivered by Element Capital Management, head over to Was Jeffrey Talpins Right About These 10 Stocks?
5. Cummins Inc. (NYSE:CMI)
No. of Hedge Fund Holders: 36
Performance of CMI Over the Past Six Months: +26%
Cummins Inc. (NYSE:CMI) manufactures diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, in addition to standby and prime power generators. It also sells powertrain components, including filtration products, transmissions, turbochargers, etc.
Insider Monkey was able to profile 895 hedge funds to discover that 36 hedge funds invested in the company at the end of Q2 2022.
Analysts of Citigroup covered Cummins Inc. (NYSE:CMI) on August 16 and increased their price objective from $220.00 to $265.00. They gave a “Buy” rating.
4. Convey Health Solutions Holdings, Inc. (NYSE:CNVY)
No. of Hedge Fund Holders: 10
Performance of CNVY Over the Past Six Months: Convey was sold to TPG Capital in June 2022 for $10.50 per share in cash, or approximately $1.1 billion.
Convey Health Solutions Holdings, Inc. (NYSE:CNVY) is a healthcare platform utilizing technology and processes for the improvement of government-sponsored health plans, including Medicare Advantage. The company carries out its operations in 2 business segments: Technology-Enabled Solutions and Advisory Services.
Barclays initiated coverage on Convey Health Solutions Holdings, Inc. (NYSE:CNVY) and downgraded the stock from an “Overweight” rating to an “Equal-weight” rating. They also lowered the price target from $12.00 to $11.00 on June 22.
Insider Monkey scanned 895 hedge fund portfolios for the second quarter of 2022 to find out that 10 bought the company’s shares.
3. Caterpillar Inc. (NYSE:CAT)
No. of Hedge Fund Holders: 45
Performance of CAT Over the Past Six Months: +16%
Caterpillar Inc. (NYSE:CAT) is a leading manufacturer of heavy equipment, power solutions, and locomotives. The company is divided into 4 segments: Construction Industries, Resource Industries, Energy and transportation, and Caterpillar Financial Services.
On August 3, Wells Fargo & Company covered Caterpillar Inc. (NYSE:CAT) and reduced its price objective from $230.00 to $205.00. It gave an “Equal-weight” rating to the company.
Diamond Hill Capital, an investment management firm, published its first quarter of 2022 investor letter and mentioned Caterpillar Inc. (NYSE:CAT). Here is what the fund said:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
2. Canadian Pacific Railway Limited (NYSE:CP)
No. of Hedge Fund Holders: 42
Performance of CP Over the Past Six Months: +14%
Canadian Pacific Railway Limited (NYSE:CP) owns and operates a transcontinental freight railway in Canada and the US. The company offers rail and intermodal transportation services over a network of around 13,000 miles.
Bank of America covered Canadian Pacific Railway Limited (NYSE:CP) and raised its rating from “Neutral” to “Buy.” It has increased its price objective from $85.00 to $87.00 in a report dated September 12.
Insider Monkey surveyed 895 hedge fund portfolios for their June quarter investments and discovered that 42 held stakes in Canadian Pacific Railway Limited (NYSE:CP). In the preceding quarter, 41 hedge funds reported owning stakes in the company.
Pershing Square Holdings, an investment holding company, published its second quarter of 2022 investor letter in which it mentioned Canadian Pacific Railway Limited (NYSE:CP). Here is what the fund said:
“Canadian Pacific Railway Limited (NYSE:CP) is a high-quality, inflation-protected business led by a best-in-class management team that operates in an oligopolistic industry with significant barriers to entry. With an improving volume and pricing outlook combined with the upcoming transformational acquisition of Kansas City Southern (“KCS”), we believe that CP’s prospects are bright.
CP reported revenue growth of 7% in the second quarter as pricing and mix, fuel surcharge pass-throughs and foreign exchange more than offset a small decline in volumes. CP is leveraging the strong pricing environment to renew contracts at an average price increase of over 6%. Pricing directly benefits earnings as rails pass on increases in fuel and other expenses to customers through contractual fuel surcharges and CPI escalators. In addition to earnings growth, high inflation should help rail transportation take share from trucking and lead to incremental volume growth over time. Customers are choosing cheaper transportation solutions as prices rise, and CP’s mission-critical rail service is often the cheapest or only viable method for transporting heavy freight over long distances. High fuel prices and wage gains also disproportionally increase the cost of trucking, which is up to three times less fuel efficient and much more labor intensive than rail transportation.
The demand outlook for CP continues to improve, especially given the current geopolitical environment. Russia’s invasion of Ukraine and the resulting supply disruptions have boosted demand for Canadian exports such as grain and potash. Deglobalization has also increased the likelihood of major North American onshoring and energy production, which will accelerate CP’s volume growth in the future. Total volumes declined by 2% in the second quarter due to the smaller than average Canadian grain harvest, while volumes excluding grain increased by 5%. The grain headwind will flip to a tailwind in the fall as CP anticipates a normal grain crop, which supports management’s double-digit volume and revenue growth outlook for the second half of 2022. …” (Click here to read the full text)
1. Canadian National Railway Company (NYSE:CNI)
No. of Hedge Fund Holders: 41
Performance of CNI Over the Past Six Months: +11.47%
Canadian National Railway Company (NYSE:CNI) is a leading North American transportation and logistics company, and its railroaders transport goods for a wide range of business sectors. These sectors range from resource products to manufactured products to consumer goods.
On September 30, Barclays initiated coverage on Canadian National Railway Company (NYSE:CNI), and reduced its price objective on the stock from $115.00 to $110.00.
Of the 895 hedge funds in Insider Monkey’s database, Canadian National Railway Company (NYSE:CNI) was held by 41 funds as of the second quarter of 2022.
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