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Is FleetCor Technologies, Inc. (FLT) A Good Stock To Buy?

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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 873 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 June 30th. In this article we look at what those investors think of FleetCor Technologies, Inc. (NYSE:FLT).

Is FleetCor Technologies, Inc. (NYSE:FLT) a good stock to buy? Hedge funds were taking a bullish view. The number of long hedge fund bets advanced by 1 lately. FleetCor Technologies, Inc. (NYSE:FLT) was in 40 hedge funds' portfolios at the end of June. The all time high for this statistic is 60. Our calculations also showed that FLT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.

Lee Ainslie's Top 10 Stock Picks
Lee Ainslie's Top 10 Stock Picks

Lee Ainslie of Maverick Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. 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. With all of this in mind we're going to take a glance at the fresh hedge fund action encompassing FleetCor Technologies, Inc. (NYSE:FLT).

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

At the end of the second quarter, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FLT over the last 24 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.

Of the funds tracked by Insider Monkey, Viking Global, managed by Andreas Halvorsen, holds the biggest position in FleetCor Technologies, Inc. (NYSE:FLT). Viking Global has a $735.6 million position in the stock, comprising 2.2% of its 13F portfolio. The second most bullish fund manager is Tiger Global Management LLC, managed by Chase Coleman, which holds a $165.8 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism comprise Lee Ainslie's Maverick Capital, William B. Gray's Orbis Investment Management and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Incline Global Management allocated the biggest weight to FleetCor Technologies, Inc. (NYSE:FLT), around 5.52% of its 13F portfolio. Birch Run Capital is also relatively very bullish on the stock, setting aside 4.15 percent of its 13F equity portfolio to FLT.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Orbis Investment Management, managed by William B. Gray, assembled the most outsized position in FleetCor Technologies, Inc. (NYSE:FLT). Orbis Investment Management had $105.1 million invested in the company at the end of the quarter. James Parsons's Junto Capital Management also initiated a $61.5 million position during the quarter. The other funds with new positions in the stock are James Thomas Berylson's Berylson Capital Partners, Paul Tudor Jones's Tudor Investment Corp, and Peter Seuss's Prana Capital Management.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as FleetCor Technologies, Inc. (NYSE:FLT) but similarly valued. We will take a look at EXACT Sciences Corporation (NASDAQ:EXAS), Waters Corporation (NYSE:WAT), Invitation Homes Inc. (NYSE:INVH), Huntington Bancshares Incorporated (NASDAQ:HBAN), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), CarMax Inc (NYSE:KMX), and TransUnion (NYSE:TRU). This group of stocks' market valuations are closest to FLT's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EXAS,35,2373655,-6 WAT,40,2643422,6 INVH,33,1131870,5 HBAN,33,443477,6 HZNP,56,4325284,8 KMX,39,1619512,-7 TRU,35,2609504,-6 Average,38.7,2163818,0.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 38.7 hedge funds with bullish positions and the average amount invested in these stocks was $2164 million. That figure was $1877 million in FLT's case. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is the most popular stock in this table. On the other hand Invitation Homes Inc. (NYSE:INVH) is the least popular one with only 33 bullish hedge fund positions. FleetCor Technologies, Inc. (NYSE:FLT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FLT is 41.2. 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 21.8% in 2021 through October 11th and beat the market again by 4.4 percentage points. Unfortunately FLT wasn't nearly as popular as these 5 stocks and hedge funds that were betting on FLT were disappointed as the stock returned -0.4% since the end of June (through 10/11) 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.