Hedge Funds Are Coming Back To Waste Connections, Inc. (WCN)

·6 min read

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Waste Connections, Inc. (NYSE:WCN).

Is Waste Connections, Inc. (NYSE:WCN) a buy, sell, or hold? Investors who are in the know were betting on the stock. The number of bullish hedge fund positions improved by 1 in recent months. Waste Connections, Inc. (NYSE:WCN) was in 32 hedge funds' portfolios at the end of June. The all time high for this statistic is 39. Our calculations also showed that WCN isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 31 hedge funds in our database with WCN holdings at the end of March.

In the financial world there are a multitude of methods stock market investors use to grade stocks. Two of the less utilized methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can beat the market by a healthy amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Alex Litowitz Magnetar Capital
Alex Litowitz Magnetar Capital

Alex Litowitz of Magnetar Capital

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. Now we're going to take a look at the key hedge fund action regarding Waste Connections, Inc. (NYSE:WCN).

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

Heading into the third quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. By comparison, 39 hedge funds held shares or bullish call options in WCN 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.

Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Waste Connections, Inc. (NYSE:WCN). Citadel Investment Group has a $123.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Echo Street Capital Management, managed by Greg Poole, which holds a $111.1 million position; 0.9% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions consist of Renaissance Technologies, James Parsons's Junto Capital Management and Joseph Sirdevan's Galibier 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 6.55% of its 13F portfolio. Bishop Rock Capital is also relatively very bullish on the stock, earmarking 4.64 percent of its 13F equity portfolio to WCN.

Consequently, specific money managers have jumped into Waste Connections, Inc. (NYSE:WCN) headfirst. GLG Partners, managed by Noam Gottesman, established the largest position in Waste Connections, Inc. (NYSE:WCN). GLG Partners had $2.4 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser's Magnetar Capital also initiated a $1.5 million position during the quarter. The other funds with new positions in the stock are Karim Abbadi and Edward McBride's Centiva Capital, Paul Tudor Jones's Tudor Investment Corp, and Renee Yao's Neo Ivy Capital.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Waste Connections, Inc. (NYSE:WCN) but similarly valued. These stocks are Copart, Inc. (NASDAQ:CPRT), Lennar Corporation (NYSE:LEN), Ferguson plc (NYSE:FERG), PACCAR Inc (NASDAQ:PCAR), AMETEK, Inc. (NYSE:AME), Unity Software Inc. (NYSE:U), and MPLX LP (NYSE:MPLX). All of these stocks' market caps are closest to WCN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CPRT,44,992348,-5 LEN,50,1974872,1 FERG,11,6877154,6 PCAR,28,623669,0 AME,38,912985,6 U,29,7263688,-10 MPLX,11,115640,3 Average,30.1,2680051,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $2680 million. That figure was $764 million in WCN's case. Lennar Corporation (NYSE:LEN) is the most popular stock in this table. On the other hand Ferguson plc (NYSE:FERG) is the least popular one with only 11 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 overall hedge fund sentiment score for WCN is 57.5. 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. Our calculations showed that top 5 most popular stocks among hedge funds 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 and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on WCN as the stock returned 8.8% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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