Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of December. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Casey's General Stores, Inc. (NASDAQ:CASY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Casey's General Stores, Inc. (NASDAQ:CASY) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 18 hedge funds' portfolios at the end of the fourth quarter of 2018. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as IDACORP Inc (NYSE:IDA), Insulet Corporation (NASDAQ:PODD), and Morningstar, Inc. (NASDAQ:MORN) to gather more data points.
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. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's view the fresh hedge fund action surrounding Casey's General Stores, Inc. (NASDAQ:CASY).
What does the smart money think about Casey's General Stores, Inc. (NASDAQ:CASY)?
At Q4's end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in CASY a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in Casey's General Stores, Inc. (NASDAQ:CASY) was held by Millennium Management, which reported holding $12.2 million worth of stock at the end of September. It was followed by Winton Capital Management with a $11.1 million position. Other investors bullish on the company included GAMCO Investors, Citadel Investment Group, and Gotham Asset Management.
Since Casey's General Stores, Inc. (NASDAQ:CASY) has experienced bearish sentiment from hedge fund managers, logic holds that there is a sect of fund managers that decided to sell off their entire stakes in the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital sold off the largest investment of all the hedgies tracked by Insider Monkey, valued at about $16.4 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund dumped about $8.4 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Casey's General Stores, Inc. (NASDAQ:CASY) but similarly valued. These stocks are IDACORP Inc (NYSE:IDA), Insulet Corporation (NASDAQ:PODD), Morningstar, Inc. (NASDAQ:MORN), and Ceridian HCM Holding Inc. (NYSE:CDAY). All of these stocks' market caps are closest to CASY's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IDA,20,226667,9 PODD,22,393036,0 MORN,20,191984,1 CDAY,17,541979,-1 Average,19.75,338417,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $338 million. That figure was $56 million in CASY's case. Insulet Corporation (NASDAQ:PODD) is the most popular stock in this table. On the other hand Ceridian HCM Holding Inc. (NYSE:CDAY) is the least popular one with only 17 bullish hedge fund positions. Casey's General Stores, Inc. (NASDAQ:CASY) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 21.3% through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Unfortunately CASY wasn't in this group. Hedge funds that bet on CASY were disappointed as the stock returned 1.6% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 12 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.