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Roadrunner Transportation Systems Inc (RRTS): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

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Is Roadrunner Transportation Systems Inc (NYSE:RRTS) a buy, sell, or hold? The best stock pickers are becoming hopeful. The number of bullish hedge fund bets rose by 4 in recent months.

According to most stock holders, hedge funds are perceived as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, we hone in on the bigwigs of this group, about 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total asset base, and by monitoring their highest performing picks, we have unsheathed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as integral, bullish insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are many reasons for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).

Consequently, it’s important to take a peek at the latest action surrounding Roadrunner Transportation Systems Inc (NYSE:RRTS).

Hedge fund activity in Roadrunner Transportation Systems Inc (NYSE:RRTS)

At the end of the first quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 44% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully.

Roadrunner Transportation Systems Inc (NYSE:RRTS)According to our comprehensive database, Cardinal Capital, managed by Amy Minella, holds the biggest position in Roadrunner Transportation Systems Inc (NYSE:RRTS). Cardinal Capital has a $15.2 million position in the stock, comprising 0.9% of its 13F portfolio. Coming in second is Scopus Asset Management, managed by Alexander Mitchell, which held a $7.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish include Richard S. Meisenberg’s ACK Asset Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.

As aggregate interest increased, key hedge funds were breaking ground themselves. Scopus Asset Management, managed by Alexander Mitchell, assembled the biggest position in Roadrunner Transportation Systems Inc (NYSE:RRTS). Scopus Asset Management had 7.6 million invested in the company at the end of the quarter. Mark Broach’s Manatuck Hill Partners also made a $1.6 million investment in the stock during the quarter. The following funds were also among the new RRTS investors: Israel Englander’s Catapult Capital Management, Steven Cohen’s SAC Capital Advisors, and John Overdeck and David Siegel’s Two Sigma Advisors.

How have insiders been trading Roadrunner Transportation Systems Inc (NYSE:RRTS)?

Insider buying is at its handiest when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Roadrunner Transportation Systems Inc (NYSE:RRTS) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Roadrunner Transportation Systems Inc (NYSE:RRTS). These stocks are XPO Logistics Inc (NYSE:XPO), Air Transport Services Group Inc. (NASDAQ:ATSG), UTi Worldwide Inc. (NASDAQ:UTIW), Hub Group Inc (NASDAQ:HUBG), and Forward Air Corporation (NASDAQ:FWRD). This group of stocks belong to the air delivery & freight services industry and their market caps are closest to RRTS’s market cap.

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