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 821 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, a week after the market trough. In this article we look at what those investors think of Waste Connections, Inc. (NYSE:WCN).
Is Waste Connections, Inc. (NYSE:WCN) a bargain? The best stock pickers are turning less bullish. The number of bullish hedge fund bets were cut by 4 in recent months. Our calculations also showed that WCN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_322405" align="aligncenter" width="399"] New York Stock Exchange[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's take a glance at the new hedge fund action encompassing Waste Connections, Inc. (NYSE:WCN).
What does smart money think about Waste Connections, Inc. (NYSE:WCN)?
At the end of the first quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in WCN 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.
The largest stake in Waste Connections, Inc. (NYSE:WCN) was held by Renaissance Technologies, which reported holding $156.2 million worth of stock at the end of September. It was followed by Senator Investment Group with a $46.5 million position. Other investors bullish on the company included Osterweis Capital Management, Two Sigma Advisors, and Echo Street Capital Management. In terms of the portfolio weights assigned to each position Galibier Capital Management allocated the biggest weight to Waste Connections, Inc. (NYSE:WCN), around 6.56% of its 13F portfolio. Brasada Capital Management is also relatively very bullish on the stock, designating 3.21 percent of its 13F equity portfolio to WCN.
Seeing as Waste Connections, Inc. (NYSE:WCN) has faced bearish sentiment from the smart money, it's safe to say that there is a sect of hedgies who sold off their full holdings heading into Q4. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management said goodbye to the biggest stake of all the hedgies tracked by Insider Monkey, valued at close to $25.4 million in stock. Alexander Mitchell's fund, Scopus Asset Management, also sold off its stock, about $13.8 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Waste Connections, Inc. (NYSE:WCN) but similarly valued. These stocks are Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), Cummins Inc. (NYSE:CMI), Liberty Broadband Corp (NASDAQ:LBRDK), and ING Groep N.V. (NYSE:ING). This group of stocks' market values match WCN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBVA,8,142085,0 CMI,34,326816,-5 LBRDK,45,3334060,-1 ING,13,298860,-1 Average,25,1025455,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $1025 million. That figure was $465 million in WCN's case. Liberty Broadband Corp (NASDAQ:LBRDK) is the most popular stock in this table. On the other hand Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) is the least popular one with only 8 bullish hedge fund positions. Waste Connections, Inc. (NYSE:WCN) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on WCN as the stock returned 21.6% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.