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Hedge Funds Are Souring On Expeditors International of Washington, Inc. (EXPD)

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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Expeditors International of Washington, Inc. (NASDAQ:EXPD) based on those filings.

Is Expeditors International of Washington, Inc. (NASDAQ:EXPD) undervalued? Prominent investors were cutting their exposure. The number of long hedge fund bets retreated by 3 in recent months. Expeditors International of Washington, Inc. (NASDAQ:EXPD) was in 26 hedge funds' portfolios at the end of September. 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 Q3 rankings). There were 29 hedge funds in our database with EXPD holdings at the end of June.

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. Keeping this in mind we're going to take a glance at the key hedge fund action encompassing Expeditors International of Washington, Inc. (NASDAQ:EXPD).

Clint Carlson of Carlson Capital

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

At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EXPD over the last 25 quarters. With the smart money's capital changing hands, there exists an "upper tier" of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey's hedge fund database, Cliff Asness's AQR Capital Management has the largest position in Expeditors International of Washington, Inc. (NASDAQ:EXPD), worth close to $198.6 million, comprising 0.4% of its total 13F portfolio. The second largest stake is held by Andy Brown of Cedar Rock Capital, with a $158.3 million position; 3.8% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions consist of Israel Englander's Millennium Management, Renaissance Technologies and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors. 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 3.79% of its 13F portfolio. Arjuna Capital is also relatively very bullish on the stock, setting aside 0.97 percent of its 13F equity portfolio to EXPD.

Seeing as Expeditors International of Washington, Inc. (NASDAQ:EXPD) has faced declining sentiment from the aggregate hedge fund industry, it's safe to say that there were a few hedgies that slashed their full holdings in the third quarter. It's worth mentioning that Paul Marshall and Ian Wace's Marshall Wace LLP sold off the biggest stake of all the hedgies tracked by Insider Monkey, worth about $22.8 million in stock. Ray Dalio's fund, Bridgewater Associates, also dumped its stock, about $7.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 3 funds in the third quarter.

Let's now take a look at hedge fund activity in other stocks similar to Expeditors International of Washington, Inc. (NASDAQ:EXPD). These stocks are Teladoc Health, Inc (NYSE:TDOC), Enphase Energy Inc (NASDAQ:ENPH), Dynatrace, Inc. (NYSE:DT), NetApp Inc. (NASDAQ:NTAP), Teledyne Technologies Incorporated (NYSE:TDY), Citizens Financial Group Inc (NYSE:CFG), and Entergy Corporation (NYSE:ETR). All of these stocks' market caps resemble EXPD's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TDOC,40,2836350,-3 ENPH,52,637786,8 DT,41,2389054,-9 NTAP,29,671456,-2 TDY,38,1703394,2 CFG,34,361791,-2 ETR,30,283209,-1 Average,37.7,1269006,-1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.7 hedge funds with bullish positions and the average amount invested in these stocks was $1269 million. That figure was $453 million in EXPD's case. Enphase Energy Inc (NASDAQ:ENPH) is the most popular stock in this table. On the other hand NetApp Inc. (NASDAQ:NTAP) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Expeditors International of Washington, Inc. (NASDAQ:EXPD) is even less popular than NTAP. Our overall hedge fund sentiment score for EXPD is 25.6. 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 31.1% in 2021 through December 9th but managed to beat the market again by 5.1 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 8.2% since the end of the third quarter (through 12/9) 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.