Do Hedge Funds Love Schneider National, Inc. (SNDR)?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Schneider National, Inc. (NYSE:SNDR) to find out whether there were any major changes in hedge funds’ views.

Schneider National, Inc. (NYSE:SNDR) was in 19 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 22. SNDR investors should be aware of a decrease in enthusiasm from smart money recently. There were 20 hedge funds in our database with SNDR holdings at the end of December. Our calculations also showed that SNDR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are many methods investors have at their disposal to value their stock investments. A duo of the less known methods are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best money managers can trounce the broader indices by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to view the key hedge fund action encompassing Schneider National, Inc. (NYSE:SNDR).

Do Hedge Funds Think SNDR Is A Good Stock To Buy Now?

At the end of March, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in SNDR a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Is SNDR A Good Stock To Buy?

More specifically, AQR Capital Management was the largest shareholder of Schneider National, Inc. (NYSE:SNDR), with a stake worth $54 million reported as of the end of March. Trailing AQR Capital Management was Arrowstreet Capital, which amassed a stake valued at $15.3 million. Royce & Associates, D E Shaw, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Interval Partners allocated the biggest weight to Schneider National, Inc. (NYSE:SNDR), around 0.25% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.23 percent of its 13F equity portfolio to SNDR.

Due to the fact that Schneider National, Inc. (NYSE:SNDR) has experienced falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of funds who sold off their full holdings in the first quarter. At the top of the heap, Renaissance Technologies said goodbye to the largest stake of the 750 funds watched by Insider Monkey, worth an estimated $7.9 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund sold off about $4.8 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds in the first quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Schneider National, Inc. (NYSE:SNDR) but similarly valued. We will take a look at Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN), Sunnova Energy International Inc. (NYSE:NOVA), Ormat Technologies, Inc. (NYSE:ORA), Everbridge, Inc. (NASDAQ:EVBG), Navistar International Corp (NYSE:NAV), Workiva Inc (NYSE:WK), and SAGE Therapeutics Inc (NASDAQ:SAGE). This group of stocks’ market values match SNDR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BHVN 33 359789 -6
NOVA 26 327923 -6
ORA 17 251963 1
EVBG 49 1083099 13
NAV 21 2077934 -8
WK 22 438709 3
SAGE 27 401401 -2
Average 27.9 705831 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.9 hedge funds with bullish positions and the average amount invested in these stocks was $706 million. That figure was $128 million in SNDR’s case. Everbridge, Inc. (NASDAQ:EVBG) is the most popular stock in this table. On the other hand Ormat Technologies, Inc. (NYSE:ORA) is the least popular one with only 17 bullish hedge fund positions. Schneider National, Inc. (NYSE:SNDR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SNDR is 33. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately SNDR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SNDR investors were disappointed as the stock returned -14.7% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.