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Is it a Good Choice to Invest in Canadian Pacific Railway (CNP)?

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ClearBridge Investments, an investment management firm, published its “International Growth EAFE Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. During the third quarter, the ClearBridge International Growth EAFE Strategy underperformed its MSCI EAFE Index benchmark. The Strategy delivered gains across two of the 10 sectors in which it was invested (out of 11 total), with the health care sector the primary contributor, while the consumer discretionary, communication services, and consumer staples sectors were the largest detractors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge International Growth EAFE Strategy, in its Q3 2021 investor letter, mentioned Canadian Pacific Railway Limited (NYSE: CP) and discussed its stance on the firm. Canadian Pacific Railway Limited is a Calgary, Canada-based rail transport company with a $70.3 billion market capitalization. CP delivered a 5.27% return since the beginning of the year, while its 12-month returns are up by 0.44%. The stock closed at $75.73 per share on January 07, 2022.

Here is what ClearBridge International Growth EAFE Strategy has to say about Canadian Pacific Railway Limited in its Q3 2021 investor letter:

"The other major headwind to relative performance in the quarter was Canadian Pacific Railway. The stock has been a strong performer for the Strategy but negative sentiment around its bidding war for U.S. rail operator Kansas City Southern has weighed on the stock since late May. As a result, the cyclical uptick we expected from the company has been masked by the takeover. Indeed, we have been frustrated by the muted performance among Canadian Pacific and other recently added positions in our structural bucket of growth companies with more cyclical business models or that are undergoing a restructuring that should lead to a step change improvement in earnings. As more regions reopen from COVID-19 and spending rebounds, we expect better performance from our structural names, including Airbus and hospitality and food service provider Compass."

Based on our calculations, Canadian Pacific Railway Limited (NYSE: CP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CP was in 38 hedge fund portfolios at the end of the third quarter of 2021, compared to 25 funds in the previous quarter. Canadian Pacific Railway Limited (NYSE: CP) delivered a 9.42% return in the past 3 months.

In June 2021, we also shared another hedge fund's views on CP in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

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