Technology stocks had a lousy start to 2022. QQQ lost 9% of its value in January. Pandemic winners are getting crushed while energy stocks are surging. Roblox lost 36%, Moderna lost 33%, and Carvana and Shopify lost 30% of their values in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Old Dominion Freight Line (NASDAQ:ODFL) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Old Dominion Freight Line (NASDAQ:ODFL) investors should be aware of a decrease in hedge fund sentiment in recent months. Old Dominion Freight Line (NASDAQ:ODFL) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 50. There were 47 hedge funds in our database with ODFL holdings at the end of June. Our calculations also showed that ODFL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Fred DiSanto of Ancora Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to view the key hedge fund action surrounding Old Dominion Freight Line (NASDAQ:ODFL).
Do Hedge Funds Think ODFL Is A Good Stock To Buy Now?
At the end of September, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -30% from the previous quarter. By comparison, 47 hedge funds held shares or bullish call options in ODFL a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Cliff Asness’s AQR Capital Management has the largest position in Old Dominion Freight Line (NASDAQ:ODFL), worth close to $256.5 million, amounting to 0.5% of its total 13F portfolio. The second most bullish fund manager is Echo Street Capital Management, led by Greg Poole, holding a $140.3 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions contain Ray Dalio’s Bridgewater Associates, Ken Griffin’s Citadel Investment Group and John Osterweis’s Osterweis Capital Management. In terms of the portfolio weights assigned to each position Aubrey Capital Management allocated the biggest weight to Old Dominion Freight Line (NASDAQ:ODFL), around 2.17% of its 13F portfolio. Osterweis Capital Management is also relatively very bullish on the stock, dishing out 2.07 percent of its 13F equity portfolio to ODFL.
Seeing as Old Dominion Freight Line (NASDAQ:ODFL) has experienced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few funds who sold off their positions entirely last quarter. Intriguingly, Steve Cohen’s Point72 Asset Management cut the biggest investment of the 750 funds watched by Insider Monkey, comprising close to $11.4 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund dumped about $8.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 14 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Old Dominion Freight Line (NASDAQ:ODFL) but similarly valued. We will take a look at Copart, Inc. (NASDAQ:CPRT), Pinterest, Inc. (NYSE:PINS), Waste Connections, Inc. (NYSE:WCN), CBRE Group, Inc. (NYSE:CBRE), Affirm Holdings, Inc. (NASDAQ:AFRM), Verisk Analytics, Inc. (NASDAQ:VRSK), and EPAM Systems Inc (NYSE:EPAM). This group of stocks’ market values match ODFL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPRT | 42 | 998095 | -2 |
| PINS | 58 | 2006795 | -5 |
| WCN | 32 | 785747 | 0 |
| CBRE | 37 | 3096989 | 0 |
| AFRM | 39 | 1491413 | 14 |
| VRSK | 25 | 1638278 | -11 |
| EPAM | 42 | 945738 | 9 |
| Average | 39.3 | 1566151 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.3 hedge funds with bullish positions and the average amount invested in these stocks was $1566 million. That figure was $710 million in ODFL’s case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand Verisk Analytics, Inc. (NASDAQ:VRSK) is the least popular one with only 25 bullish hedge fund positions. Old Dominion Freight Line (NASDAQ:ODFL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ODFL is 22.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on ODFL as the stock returned 5.6% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
