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Is Cigna Corporation (CI) A Good Stock To Buy?

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In this article we will check out the progression of hedge fund sentiment towards Cigna Corporation (NYSE:CI) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is CI a good stock to buy? Cigna Corporation (NYSE:CI) has experienced a decrease in hedge fund interest in recent months. Cigna Corporation (NYSE:CI) was in 58 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 76. Our calculations also showed that CI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now we're going to review the key hedge fund action encompassing Cigna Corporation (NYSE:CI).

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

Larry Robbins of Glenview Capital

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

Heading into the fourth quarter of 2021, a total of 58 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the second quarter of 2021. On the other hand, there were a total of 62 hedge funds with a bullish position in CI a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Arrowstreet Capital held the most valuable stake in Cigna Corporation (NYSE:CI), which was worth $350.2 million at the end of the third quarter. On the second spot was BloombergSen which amassed $280.6 million worth of shares. Glenview Capital, Lyrical Asset Management, and Crake Asset Management 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 14.38% of its 13F portfolio. Solel Partners is also relatively very bullish on the stock, setting aside 12.14 percent of its 13F equity portfolio to CI.

Since Cigna Corporation (NYSE:CI) has witnessed a decline in interest from hedge fund managers, we can see that there were a few hedgies that decided to sell off their entire stakes last quarter. Intriguingly, Robert Pitts's Steadfast Capital Management dumped the biggest investment of the 750 funds tracked by Insider Monkey, worth about $237.2 million in stock, and Jeffrey Altman's Owl Creek Asset Management was right behind this move, as the fund said goodbye to about $84.9 million worth. These transactions are interesting, as total hedge fund interest was cut by 5 funds last quarter.

Let's now review hedge fund activity in other stocks similar to Cigna Corporation (NYSE:CI). These stocks are Westpac Banking Corporation (NYSE:WBK), Petroleo Brasileiro S.A. - Petrobras (NYSE:PBR), CSX Corporation (NASDAQ:CSX), ABB Ltd (NYSE:ABB), BioNTech SE (NASDAQ:BNTX), Moody's Corporation (NYSE:MCO), and The Southern Company (NYSE:SO). This group of stocks' market caps match CI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WBK,6,34160,2 PBR,23,3004383,-2 CSX,56,3915444,0 ABB,19,721684,4 BNTX,28,689029,8 MCO,58,15699733,14 SO,30,676309,-7 Average,31.4,3534392,2.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.4 hedge funds with bullish positions and the average amount invested in these stocks was $3534 million. That figure was $2302 million in CI's case. Moody's Corporation (NYSE:MCO) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 6 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 72.9. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 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 -4.1% since the end of September (through 11/30) 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.