Hedge Funds Are Coming Back To Forward Air Corporation (FWRD)

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Forward Air Corporation (NASDAQ:FWRD).

Is Forward Air Corporation (NASDAQ:FWRD) going to take off soon? Investors who are in the know were turning bullish. The number of long hedge fund positions moved up by 6 lately. Forward Air Corporation (NASDAQ:FWRD) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 21. Our calculations also showed that FWRD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Keeping this in mind we’re going to take a peek at the recent hedge fund action regarding Forward Air Corporation (NASDAQ:FWRD).

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

At Q2’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 46% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in FWRD a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

The largest stake in Forward Air Corporation (NASDAQ:FWRD) was held by Ancora Advisors, which reported holding $165.6 million worth of stock at the end of June. It was followed by Royce & Associates with a $45.5 million position. Other investors bullish on the company included Cardinal Capital, Scopus Asset Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Ancora Advisors allocated the biggest weight to Forward Air Corporation (NASDAQ:FWRD), around 4.33% of its 13F portfolio. Cardinal Capital is also relatively very bullish on the stock, designating 0.82 percent of its 13F equity portfolio to FWRD.

As aggregate interest increased, key money managers were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the largest position in Forward Air Corporation (NASDAQ:FWRD). Two Sigma Advisors had $0.5 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Cliff Asness’s AQR Capital Management, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

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 ESCO Technologies Inc. (NYSE:ESE), Vericel Corp (NASDAQ:VCEL), Shenandoah Telecommunications Company (NASDAQ:SHEN), At Home Group Inc. (NYSE:HOME), CorVel Corporation (NASDAQ:CRVL), Bloomin’ Brands Inc (NASDAQ:BLMN), and Bally’s Corporation (NYSE:BALY). This group of stocks’ market values match FWRD’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $366 million. That figure was $318 million in FWRD’s case. At Home Group Inc. (NYSE:HOME) is the most popular stock in this table. On the other hand Shenandoah Telecommunications Company (NASDAQ:SHEN) is the least popular one with only 7 bullish hedge fund positions. Forward Air Corporation (NASDAQ:FWRD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FWRD is 54.8. 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately FWRD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); FWRD investors were disappointed as the stock returned 1.5% since the end of June (through 10/22) 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.