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Do Hedge Funds and Insiders Love Werner Enterprises, Inc. (WERN)?

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Is Werner Enterprises, Inc. (NASDAQ:WERN) a buy here? Hedge funds are becoming less confident. The number of long hedge fund positions retreated by 11 lately.

According to most investors, hedge funds are viewed as slow, outdated financial tools of yesteryear. While there are over 8000 funds trading at present, we at Insider Monkey hone in on the aristocrats of this club, around 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by watching their best picks, we have deciphered a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as key, optimistic insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are many motivations for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).

With all of this in mind, it’s important to take a peek at the latest action regarding Werner Enterprises, Inc. (NASDAQ:WERN).

Hedge fund activity in Werner Enterprises, Inc. (NASDAQ:WERN)

At the end of the first quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -52% from the first quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in Werner Enterprises, Inc. (NASDAQ:WERN), worth close to $21 million, comprising 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Cliff Asness of AQR Capital Management, with a $7.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include John Fichthorn’s Dialectic Capital Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital and John Overdeck and David Siegel’s Two Sigma Advisors.

Seeing as Werner Enterprises, Inc. (NASDAQ:WERN) has experienced declining sentiment from the smart money, we can see that there was a specific group of hedge funds that decided to sell off their positions entirely last quarter. At the top of the heap, Ken Grossman and Glen Schneider’s SG Capital Management said goodbye to the largest position of all the hedgies we track, comprising close to $6 million in stock., and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund cut about $5.8 million worth. These transactions are interesting, as total hedge fund interest fell by 11 funds last quarter.

What do corporate executives and insiders think about Werner Enterprises, Inc. (NASDAQ:WERN)?

Insider buying is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last half-year time frame, Werner Enterprises, Inc. (NASDAQ:WERN) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Werner Enterprises, Inc. (NASDAQ:WERN). These stocks are Heartland Express, Inc. (NASDAQ:HTLD), Landstar System, Inc. (NASDAQ:LSTR), Knight Transportation (NYSE:KNX), Swift Transportation Co (NYSE:SWFT), and Con-way Inc (NYSE:CNW). This group of stocks are in the trucking industry and their market caps are similar to WERN’s market cap.

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