On Sale: Buy Rail Giant Kansas City Southern (KSU) Cheaper Than This Outperforming Hedge Fund Titan

Lee Ainslie's Maverick Capital was down 1.2% in August, but that was nothing compared to the 5-10% losses witness by his hedge fund peers in the volatile month. Also astonishing is the fact that the hedge fund remains up more than 20% on the year, while many hedge funds are sitting on year-to-date losses. Given this impress track record, we thought that we'd bring attention to one of Ainslie's most recent stock picks that you can buy for cheaper than the guru himself.

The stock is question is Kansas City Southern (NYSE: KSU).

In the second quarter, Maverick Capital accumulated 2.4 million shares of the rail provider. KSU started the second quarter at $101.72 and ended at at $100.85. The lowest price in the quarter was $90.02. Shares traded in the mid-to-low $90s most of the month. Logic would suggest Ainslie's cost basis is around $92-$95 per share. The current price is $90.65.

Now may be a good time to look at the rail stock. Recently noted KSU bear, John Larkin of Stifel, said the stock has been "sufficiently beaten down."

"We think the stock has been sufficiently beaten down for us to remove our Sell rating and mark the name as fully valued," Larkin said in his recent upgrade report. He added, "Our rating had previously been predicated on poor company guidance related to overly optimistic expectations in oil, auto, and intermodal. Oil is now at its lowest level in years, automobile factory starts have been delayed, intermodal service is too poor to trump trucking, and the primary port of call is too small to warrant growth. We think this story has fully played out and in due time could potentially become interesting as those stories turn around."

If Ainslie and Larkin are right, which we suspect they are, now could be a great time to start nibbling on the shares.

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