XPO Logistics Inc (XPO): Are Hedge Funds Right About This Stock?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. What do these smart investors think about XPO Logistics Inc (NYSE:XPO)?

XPO Logistics Inc (NYSE:XPO) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. XPO Logistics Inc (NYSE:XPO) was in 40 hedge funds’ portfolios at the end of December. The all time high for this statistic is 47. There were 39 hedge funds in our database with XPO positions at the end of the third quarter. Our calculations also showed that XPO isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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

At the end of December, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. By comparison, 32 hedge funds held shares or bullish call options in XPO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Orbis Investment Management was the largest shareholder of XPO Logistics Inc (NYSE:XPO), with a stake worth $1666.4 million reported as of the end of December. Trailing Orbis Investment Management was Spruce House Investment Management, which amassed a stake valued at $461.7 million. Lyrical Asset Management, MFN Partners, and D E Shaw 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 Lansing Management allocated the biggest weight to XPO Logistics Inc (NYSE:XPO), around 15.05% of its 13F portfolio. Spruce House Investment Management is also relatively very bullish on the stock, dishing out 14.13 percent of its 13F equity portfolio to XPO.

There weren’t any hedge funds initiating brand new positions in the stock during the fourth quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as XPO Logistics Inc (NYSE:XPO) but similarly valued. These stocks are F5 Networks, Inc. (NASDAQ:FFIV), AbCellera Biologics Inc. (NASDAQ:ABCL), Universal Display Corporation (NASDAQ:OLED), Guidewire Software Inc (NYSE:GWRE), Pegasystems Inc. (NASDAQ:PEGA), LKQ Corporation (NASDAQ:LKQ), and Allegion plc (NYSE:ALLE). This group of stocks’ market valuations resemble XPO’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FFIV 34 1131637 -2
ABCL 25 2316582 25
OLED 24 93963 4
GWRE 35 1577177 1
PEGA 32 2099135 0
LKQ 50 1611034 -1
ALLE 27 845921 -5
Average 32.4 1382207 3.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.4 hedge funds with bullish positions and the average amount invested in these stocks was $1382 million. That figure was $2981 million in XPO’s case. LKQ Corporation (NASDAQ:LKQ) is the most popular stock in this table. On the other hand Universal Display Corporation (NASDAQ:OLED) is the least popular one with only 24 bullish hedge fund positions. XPO Logistics Inc (NYSE:XPO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XPO is 62.3. 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 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on XPO as the stock returned 16.7% since the end of Q4 (through 4/30) 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.