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Should You Avoid Ryder System, Inc. (NYSE:R)?

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Is Ryder System, Inc. (NYSE:R) the right pick for your portfolio? Investors who are in the know are taking a pessimistic view. The number of long hedge fund bets dropped by 1 lately.

Ryder System, Inc. (NYSE:R)

According to most stock holders, hedge funds are viewed as worthless, old investment tools of the past. While there are over 8000 funds in operation today, we at Insider Monkey choose to focus on the masters of this group, close to 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their top equity investments, we have come up with a few 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 started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as integral, bullish insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are plenty of incentives for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).

Keeping this in mind, we’re going to take a glance at the key action regarding Ryder System, Inc. (NYSE:R).

What does the smart money think about Ryder System, Inc. (NYSE:R)?

At the end of the fourth quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of -7% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, David Dreman’s Dreman Value Management had the biggest position in Ryder System, Inc. (NYSE:R), worth close to $35.3 million, accounting for 1% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $15.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Robert Bishop’s Impala Asset Management, David Keidan’s Buckingham Capital Management and Israel Englander’s Millennium Management.

Due to the fact that Ryder System, Inc. (NYSE:R) has faced bearish sentiment from hedge fund managers, we can see that there is a sect of funds who were dropping their entire stakes in Q4. It’s worth mentioning that Steven Cohen’s SAC Capital Advisors said goodbye to the largest position of all the hedgies we watch, comprising about $7.8 million in call options, and Jim Simons of Renaissance Technologies was right behind this move, as the fund dumped about $7.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 funds in Q4.

What have insiders been doing with Ryder System, Inc. (NYSE:R)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past six months. Over the last 180-day time frame, Ryder System, Inc. (NYSE:R) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Ryder System, Inc. (NYSE:R). These stocks are GATX Corporation (NYSE:GMT), AMERCO (NASDAQ:UHAL), Air Lease Corp (NYSE:AL) and Avis Budget Group Inc. (NASDAQ:CAR). This group of stocks are in the rental & leasing services industry and their market caps resemble R’s market cap.

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