Hedge funds have filed their 13Fs for the reporting period of June 30, and Insider Monkey is sharing valuable information relating to the latest hedge fund moves and trends. After collecting and processing data from said 13Fs, we have delved into the smart money’s top quarterly stock picks, most popular technology stock picks, their stocks they are hoarding shares off, and much more. In this article, we focus on five transportation stocks which hedge funds were selling out of during the second quarter. Read on to find out which stocks they are.
Why do we pay attention to hedge fund sentiment? Most investors ignore hedge funds’ moves because as a group their average net returns trailed the market since 2008 by a large margin. Unfortunately, most investors don’t realize that hedge funds are hedged and they also charge an arm and a leg, so they are likely to underperform the market in a bull market. We ignore their short positions and by imitating hedge funds’ stock picks independently, we don’t have to pay them a dime. Our research has shown that hedge funds’ long stock picks generate strong risk adjusted returns. For instance the 15 most popular small-cap stocks outperformed the S&P 500 Index by an average of 95 basis points per month in our back-tests spanning the 1999-2012 period. We have been tracking the performance of these stocks in real-time since the end of August 2012. After all, things change and we need to verify that back-test results aren’t just a statistical fluke. We weren’t proven wrong. These 15 stocks managed to return 118% over the last 35 months and outperformed the S&P 500 Index by 60.4 percentage points (see the details here).
United Continental Holdings Inc (NYSE:UAL)
Investors with Long Positions (as of June 30): 72
Aggregate Value of Investors’ Holdings (as of June 30): $3.21 Billion
At the beginning of the second quarter, a total of 78 hedge funds out of the more than 700 tracked by Insider Monkey were invested in United Continental Holdings Inc (NYSE:UAL), with their aggregate investments valued at $3.92 billion. The airline holding company has expansion plans for its daily Shanghai flights, but these plans have been postponed for the third time this year due to landing restrictions in the city. According to the U.S. Department of Transportation’s documents, the expansion is now set to be launched in March of next year. The stock’s share price performed dismally during the second quarter, losing 21.17% of its value, accounting for slightly more than the 20.21% that it has lost year-to-date. At the end of the second quarter, GMT Capital, managed by Thomas E. Claugus, was the biggest shareholder of United Continental Holdings Inc (NYSE:UAL) out of the funds tracked by Insider Monkey. The fund has a long position of 6.77 million shares worth $358.99 million. Billionaire Daniel S. Och’s OZ Management was also long in the stock with 6.70 million shares with a market value of $355.07 million. Pennant Capital Management, headed by Alan Fournier, for example, completely sold out its 1.02 million shares position in the stock.
American Airlines Group Inc (NASDAQ:AAL)
Investors with Long Positions (as of June 30): 85
Aggregate Value of Investors’ Holdings (as of June 30): $2.55 Billion
During the second quarter, the number of hedge funds invested in American Airlines Group Inc (NASDAQ:AAL) out of the more than 700 that are tracked by Insider Monkey fell by six and the total value of their investments also dropped by 26.50% over the period. This year, things haven’t been smooth for the transportation company in the stock market, having lost 28.12% of its share price year-to-date. The second quarter alone saw American Airlines Group Inc (NASDAQ:AAL) lose 24.34%. In the company’s most recent quarterly results, it posted earnings per share of $2.62, beating consensus analysts’ estimates of $2.60. In the same quarter last year, the company posted earnings per share of $1.98. At the end of the second quarter, PAR Capital Management, led by Paul Reeder and Edward Shapiro, was long in the stock with 4.00 million shares worth $159.74 million. Cyrus Capital Partners, led by Stephen C. Freidheim, also had a long position in the stock of 3.35 million shares valued at $133.94 million. The aforementioned OZ Management and Pennant Capital Management are some of the funds that sold out of the stock during the second quarter.
Old Dominion Freight Line (NASDAQ:ODFL)
Investors with Long Positions (as of June 30): 27
Aggregate Value of Investors’ Holdings (as of June 30): $405.26 Million
Going into the second quarter, 36 out of the more than 700 hedge funds that we track were long in Old Dominion Freight Line (NASDAQ:ODFL), while their aggregate investment stood at $387.37 million. The Thomasville, North Carolina-based transportation company posted record earnings results in the second quarter, delivering $85.6 million in net income, representing a 15.9% increase on a year-over-year basis. The company’s earnings per diluted share stood at $1, representing a 16.3% rise compared to the same quarter of last year. Analysts had expected Old Dominion Freight Line (NASDAQ:ODFL) to post $0.88 in earnings per diluted share. The stock price is down by 13.25% since the beginning of the year despite the record results. At the end of the second quarter, John Brennan‘s Sirios Capital Management was long in the stock with 1.14 million shares worth $78.25 million, emerging as the biggest shareholder out of the funds tracked by Insider Monkey. Tiger Eye Capital, managed by Ben Gambill, sold out its 320,576 share-stake in the quarter. A few other hedge funds that sold out of their positions in the stockwere Arrowstreet Capital, headed by Peter Rathjens, Bruce Clarke and John Campbell, and Christopher A. Winham’s Tide Point Capital.
DHT Holdings Inc (NYSE:DHT)
Investors with Long Positions (as of June 30): 33
Aggregate Value of Investors’ Holdings (as of June 30): $294.11 Million
At the beginning of the second quarter, 40 hedge funds out of the ones tracked by Insider Monkey were long in DHT Holdings Inc (NYSE:DHT), with their aggregate investments in the stock standing at $346.89 million. The company, which operates in the shipping industry, recently announced a dividend of $0.15 per share for shareholders of record as of August 12, with the dividend payable on August 20. DHT Holdings Inc (NYSE:DHT)’s earnings per share has beaten analysts’ consensus estimates in the previous two quarters by more than 10%. In its most recent quarter, the company beat estimates by 26.3% to post earnings per share of $0.24. While the stock has only lost 2.46% of its share price year-to-date, it has actually lost 11.87% over the past three months. Stephen Feinberg‘s Cerberus Capital Management was long in the stock with 6.14 million shares with a market value of $47.73 million after reducing its stake in the stock by 19% during the quarter. Other notable shareholders in our database at the close of the quarter were Christopher Pucillo’s Solus Alternative Asset Management, and billionaire George Soros’ Soros Fund Management. Signpost Capital, led by Siddharth Thacker, sold out of its 1.27 million shares of the stock while Zenit Asset Management AB, headed by Patrik Brummer, also opted to offload its 350,000 share-position.
Saia Inc (NASDAQ:SAIA)
Investors with Long Positions (as of June 30): 11
Aggregate Value of Investors’ Holdings (as of June 30): $183.48 Million
The number of hedge funds that were long in Saia Inc (NASDAQ:SAIA) fell from 19, although the aggregate investment of funds in the stock increased by a significant 89.54% during the quarter. The company carries out a number of its activities through its wholly-owned subsidiaries in the transportation sector. In the company’s most recent report, it posted earnings per share of $0.75, representing a 41.51% rise on a year-over-year basis. The road has been bumpy for Saia Inc (NASDAQ:SAIA) this year, having lost 31.16% of its share price year-to-date. Anchorage Advisors, managed by Kevin Michael Ulrich and Anthony Davis, initiated a new position in the stock comprised of 2.30 million shares worth $90.21 million. Chuck Royce’s Royce & Associates also created a new position of 1.20 million shares with a market value of $47.00 million. The hedge fund in our database that sold out of the biggest stake was billionaire Israel Englander’s Millennium Management, having completely disposed of its 391,884 shares of Saia.