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Do Hedge Funds Love Expeditors International of Washington, Inc. (EXPD)?

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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Expeditors International of Washington, Inc. (NASDAQ:EXPD).

Is Expeditors International of Washington, Inc. (NASDAQ:EXPD) a good investment now? Hedge funds were taking a bullish view. The number of long hedge fund positions inched up by 8 in recent months. Expeditors International of Washington, Inc. (NASDAQ:EXPD) was in 29 hedge funds' portfolios at the end of June. The all time high for this statistic is 33. Our calculations also showed that EXPD isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 21 hedge funds in our database with EXPD positions at the end of the first quarter.

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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Paul Marshall Marshall Wace
Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium 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. Keeping this in mind let's review the new hedge fund action encompassing Expeditors International of Washington, Inc. (NASDAQ:EXPD).

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

At the end of June, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the first quarter of 2020. By comparison, 33 hedge funds held shares or bullish call options in EXPD a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Cedar Rock Capital held the most valuable stake in Expeditors International of Washington, Inc. (NASDAQ:EXPD), which was worth $202.4 million at the end of the second quarter. On the second spot was AQR Capital Management which amassed $184 million worth of shares. Marshall Wace LLP, Citadel Investment Group, and GLG Partners 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 Cedar Rock Capital allocated the biggest weight to Expeditors International of Washington, Inc. (NASDAQ:EXPD), around 4.61% of its 13F portfolio. Arjuna Capital is also relatively very bullish on the stock, earmarking 1.06 percent of its 13F equity portfolio to EXPD.

Consequently, specific money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the biggest position in Expeditors International of Washington, Inc. (NASDAQ:EXPD). Marshall Wace LLP had $22.8 million invested in the company at the end of the quarter. Ray Dalio's Bridgewater Associates also made a $7.5 million investment in the stock during the quarter. The following funds were also among the new EXPD investors: Louis Navellier's Navellier & Associates, John Overdeck and David Siegel's Two Sigma Advisors, and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Expeditors International of Washington, Inc. (NASDAQ:EXPD) but similarly valued. We will take a look at FleetCor Technologies, Inc. (NYSE:FLT), 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), and CarMax Inc (NYSE:KMX). This group of stocks' market values are similar to EXPD's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FLT,40,1876911,1 EXAS,35,2373655,-6 WAT,40,2643422,6 INVH,33,1131870,5 HBAN,33,443477,6 HZNP,56,4325284,8 KMX,39,1619512,-7 Average,39.4,2059162,1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 39.4 hedge funds with bullish positions and the average amount invested in these stocks was $2059 million. That figure was $498 million in EXPD'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. Compared to these stocks Expeditors International of Washington, Inc. (NASDAQ:EXPD) is even less popular than INVH. Our overall hedge fund sentiment score for EXPD is 36.4. 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. Hedge funds dodged a bullet by taking a bearish stance towards EXPD. Our calculations showed that the top 5 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th but managed to beat the market again by 4.5 percentage points. Unfortunately EXPD wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); EXPD investors were disappointed as the stock returned -8.3% since the end of the second quarter (through 10/15) 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 most of these stocks already outperformed the market since 2019.

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