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Should I Avoid Cigna Corporation (CI)?

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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. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of Cigna Corporation (NYSE:CI).

Cigna Corporation (NYSE:CI) has seen a decrease in enthusiasm from smart money in recent months. Cigna Corporation (NYSE:CI) was in 53 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 76. There were 57 hedge funds in our database with CI holdings at the end of December. Our calculations also showed that CI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

According to most traders, hedge funds are viewed as underperforming, old investment tools of years past. While there are over 8000 funds in operation at the moment, Our experts look at the upper echelon of this club, approximately 850 funds. It is estimated that this group of investors manage most of all hedge funds' total asset base, and by observing their inimitable investments, Insider Monkey has figured out a number of investment strategies that have historically outperformed the market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum 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 .

10 best stocks according to billionaire Larry Robbins
10 best stocks according to billionaire Larry Robbins

Larry Robbins of Glenview Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell 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. Keeping this in mind we're going to take a peek at the new hedge fund action encompassing Cigna Corporation (NYSE:CI).

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

At the end of the first quarter, a total of 53 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CI over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CI A Good Stock To Buy?
Is CI A Good Stock To Buy?

Among these funds, Glenview Capital held the most valuable stake in Cigna Corporation (NYSE:CI), which was worth $449.4 million at the end of the fourth quarter. On the second spot was BloombergSen which amassed $346.8 million worth of shares. Steadfast Capital Management, Crake Asset Management, and Eminence Capital 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 BloombergSen allocated the biggest weight to Cigna Corporation (NYSE:CI), around 18.93% of its 13F portfolio. Solel Partners is also relatively very bullish on the stock, designating 15.57 percent of its 13F equity portfolio to CI.

Seeing as Cigna Corporation (NYSE:CI) has faced falling interest from hedge fund managers, logic holds that there is a sect of hedge funds that decided to sell off their entire stakes by the end of the first quarter. It's worth mentioning that Michael Lowenstein's Kensico Capital dumped the biggest stake of the "upper crust" of funds followed by Insider Monkey, comprising close to $79.1 million in stock. Brian Ashford-Russell and Tim Woolley's fund, Polar Capital, also sold off its stock, about $20.1 million worth. These moves are interesting, as total hedge fund interest was cut by 4 funds by the end of the first quarter.

Let's now take a look at hedge fund activity in other stocks similar to Cigna Corporation (NYSE:CI). We will take a look at U.S. Bancorp (NYSE:USB), General Motors Company (NYSE:GM), Mondelez International Inc (NASDAQ:MDLZ), BP plc (NYSE:BP), Canadian National Railway Company (NYSE:CNI), Gilead Sciences, Inc. (NASDAQ:GILD), and Automatic Data Processing (NASDAQ:ADP). All of these stocks' market caps resemble CI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position USB,43,8335231,-17 GM,86,8053011,16 MDLZ,45,2845001,-5 BP,29,1243778,0 CNI,36,4705189,5 GILD,65,2689659,-7 ADP,42,2924374,-6 Average,49.4,4399463,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 49.4 hedge funds with bullish positions and the average amount invested in these stocks was $4399 million. That figure was $2498 million in CI's case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand BP plc (NYSE:BP) is the least popular one with only 29 bullish hedge fund positions. Cigna Corporation (NYSE:CI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CI is 43. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately CI wasn't nearly as popular as these 5 stocks and hedge funds that were betting on CI were disappointed as the stock returned 0.4% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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

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