Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Is Forward Air Corporation (NASDAQ:FWRD) the right investment to pursue these days? The smart money is getting less optimistic. The number of bullish hedge fund bets retreated by 3 in recent months. At the end of this article we will also compare FWRD to other stocks including Progress Software Corporation (NASDAQ:PRGS), Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI), and 3D Systems Corporation (NYSE:DDD) to get a better sense of its popularity.
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With all of this in mind, we’re going to go over the fresh action encompassing Forward Air Corporation (NASDAQ:FWRD).
What does the smart money think about Forward Air Corporation (NASDAQ:FWRD)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the second quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the biggest position in Forward Air Corporation (NASDAQ:FWRD). Royce & Associates has a $108.5 million position in the stock, comprising 0.6% of its 13F portfolio. The second most bullish fund manager is Daruma Asset Management, led by Mariko Gordon, holding a $53.2 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Remaining peers that hold long positions consist of Clifford Fox’s Columbus Circle Investors, Alexander Mitchell’s Scopus Asset Management and Jim Simons’s Renaissance Technologies.
Because Forward Air Corporation (NASDAQ:FWRD) has experienced bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of hedge funds that slashed their full holdings heading into Q4. Interestingly, Gregg Moskowitz’s Interval Partners dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $15.4 million in stock, and Ira Unschuld’s Brant Point Investment Management was right behind this move, as the fund said goodbye to about $7.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 3 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Forward Air Corporation (NASDAQ:FWRD) but similarly valued. We will take a look at Progress Software Corporation (NASDAQ:PRGS), Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI), 3D Systems Corporation (NYSE:DDD), and WD-40 Company (NASDAQ:WDFC). This group of stocks’ market values are closest to FWRD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRGS | 13 | 59102 | -2 |
| PLKI | 12 | 148716 | -3 |
| DDD | 12 | 93246 | -5 |
| WDFC | 7 | 61943 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $201 million in FWRD’s case. Progress Software Corporation (NASDAQ:PRGS) is the most popular stock in this table. On the other hand WD-40 Company (NASDAQ:WDFC) is the least popular one with only 7 bullish hedge fund positions. Forward Air Corporation (NASDAQ:FWRD) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PRGS might be a better candidate to consider a long position.
