Hedge Funds Head for Old Dominion Freight Line (ODFL)’s Exits: What Spooked Them?

We at Insider Monkey have gone over 742 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of Old Dominion Freight Line (NASDAQ:ODFL) based on that data.

Is Old Dominion Freight Line (NASDAQ:ODFL) a buy right now? Money managers are in a pessimistic mood. The number of long hedge fund bets that are revealed through the 13F filings contracted by 10 recently. 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 Gaming and Leisure Properties Inc (NASDAQ:GLPI), TAL Education Group (ADR) (NYSE:XRS), and Robert Half International Inc. (NYSE:RHI) to gather more data points.

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What have hedge funds been doing with Old Dominion Freight Line (NASDAQ:ODFL)?

At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a slide of 42% from the second quarter of 2016. By comparison, 23 hedge funds held shares or bullish call options in ODFL heading into this year, so the year-to-date decline is close to the same as Q3’s decline. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Richard Chilton’s Chilton Investment Company has the number one position in Old Dominion Freight Line (NASDAQ:ODFL), worth close to $25.3 million, comprising 1% of its total 13F portfolio. The second most bullish fund manager is D E Shaw, founded by David E. Shaw, which holds a $17.8 million position. Some other professional money managers that are bullish consist of Cliff Asness’ AQR Capital Management, Ira Unschuld’s Brant Point Investment Management, and Chuck Royce’s Royce & Associates. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Since Old Dominion Freight Line (NASDAQ:ODFL) has encountered bearish sentiment from hedge fund managers, it’s safe to say that there were a few fund managers that decided to sell off their full holdings heading into Q4. Interestingly, Clint Carlson’s Carlson Capital cashed in the biggest position of all the hedgies monitored by Insider Monkey, worth an estimated $11.6 million in stock. Jonathan Barrett and Paul Segal’s fund, Luminus Management, also dropped its stock, about $10.8 million worth.

Let’s go over hedge fund activity in other stocks similar to Old Dominion Freight Line (NASDAQ:ODFL). We will take a look at Gaming and Leisure Properties Inc (NASDAQ:GLPI), TAL Education Group (ADR) (NYSE:XRS), Robert Half International Inc. (NYSE:RHI), and Edgewell Personal Care Company (NYSE:EPC). This group of stocks’ market valuations resemble ODFL’s market valuation.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $496 million. That figure was $68 million in ODFL’s case. Gaming and Leisure Properties Inc (NASDAQ:GLPI) is the most popular stock in this table. On the other hand Robert Half International Inc. (NYSE:RHI) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Old Dominion Freight Line (NASDAQ:ODFL) is even less popular than RHI. 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, and in fact are getting as far away from it as possible.

Disclosure: None