Several prominent hedge fund managers have either established new positions or added to what they already owned in rail transportation supplier CSX Corp. in the fourth quarter of 2017, suggesting renewed confidence in the new executive leadership and the company's potential to capitalize on the growing economy, Reuters reported.
Steadfast Capital Management and Suvretta Capital Management made new bets on CSX during the last quarter. Chicago-based Citadel Advisors more than doubled its investment while Chilton Investment Co. took a new position of 1.5 million shares at the end of the quarter. Sirios Capital Management raised its holding by 264% to own 1.8 million shares, Reuters said, citing regulatory filings released Feb. 14 and data provided by Symmetric.IO.
It is unclear exactly when during the quarter the funds made their bets but several hedge fund managers said the price became more attractive after the death of CEO Hunter Harrison. The late CEO succeeded in turning around the transportation company; its share price rose more than 50% since the end of 2016 before plunging in mid-December on the news of Harrison's illness. After his death, the company's share price advanced by roughly 12% in around three weeks.
Investors are now watching Harrison's successor Jim Foote, who was most recently COO, for how he will implement a turnaround plan that involves deep job cuts and rail yard closures. In the past, those actions led to persistent service disruptions, customer complaints and federal scrutiny, Reuters said.