Hedge Funds Are Betting On AMERCO (UHAL)

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 5.2% in the 12 month-period that ended October 30, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular S&P 500 stocks among the hedge fund investors tracked by the Insider Monkey team returned 9.5% over the same period, which provides evidence that these money managers do have great stock picking abilities. Even more to that, 63% of these stocks managed to beat the S&P 500 Index. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like AMERCO (NASDAQ:UHAL).

AMERCO (NASDAQ:UHAL) has experienced an increase in the hedge fund interest of late. AMERCO (NASDAQ:UHAL) was in 27 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with AMERCO (NASDAQ:UHAL) holdings at the end of the previous quarter. 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 Hertz Global Holdings, Inc. (NYSE:HTZ), Everest Re Group Ltd (NYSE:RE), and CDK Global Inc (NASDAQ:CDK) to gather more data points.

To most market participants, hedge funds are assumed to be unimportant, outdated investment vehicles of the past. While there are more than an 8000 funds in operation at present, We choose to focus on the crème de la crème of this group, about 700 funds. These money managers handle bulk of the smart money’s total asset base, and by observing their unrivaled investments, Insider Monkey has discovered several investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, let’s check out the new action encompassing AMERCO (NASDAQ:UHAL).

What does the smart money think about AMERCO (NASDAQ:UHAL)?

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 23% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Quincy Lee’s Ancient Art (Teton Capital) has the most valuable position in AMERCO (NASDAQ:UHAL), worth close to $46.3 million, accounting for 7.9% of its total 13F portfolio. On Ancient Art (Teton Capital)’s heels is Shane Finemore of Manikay Partners, with a $43.3 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions contain Cliff Asness AQR Capital Management, Stephen Loukas, David A. Lorber, Zachary George’s FrontFour Capital Group, and Renaissance Technologies.

Consequently, some big names have been driving this bullishness. Tiger Management initiated the largest position in AMERCO (NASDAQ:UHAL). Tiger Management had $9.8 million invested in the company at the end of the quarter. D E Shaw also made a $5.4 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Michael Platt and William Reeves’ BlueCrest Capital Mgmt..

Let’s also examine hedge fund activity in other stocks similar to AMERCO (NASDAQ:UHAL). We will take a look at Hertz Global Holdings, Inc. (NYSE:HTZ), Everest Re Group Ltd (NYSE:RE), CDK Global Inc (NASDAQ:CDK), and Acuity Brands, Inc. (NYSE:AYI). This group of stocks’ market caps resembles AMERCO (NASDAQ:UHAL)’s market cap.

As you can see, these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $1.81 billion. That figure was $290 million in AMERCO (NASDAQ:UHAL)’s case. Hertz Global Holdings, Inc. (NYSE:HTZ) is the most popular stock in this table. On the other hand, Everest Re Group Ltd (NYSE:RE) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks, AMERCO (NASDAQ:UHAL) is even less popular than Everest Re Group Ltd (NYSE:RE). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.