Before we spend days researching a stock idea we like to take a look at how hedge funds and billionaire investors recently traded that stock. Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 10 percentage points since the end of the third quarter of 2018. This means hedge funds that are allocating a higher percentage of their portfolio to small-cap stocks were probably underperforming the market. However, this also means that as small-cap stocks start to mean revert, these hedge funds will start delivering better returns than the S&P 500 Index funds. In this article, we will take a look at what hedge funds think about Schneider National, Inc. (NYSE:SNDR).
Schneider National, Inc. (NYSE:SNDR) investors should pay attention to a decrease in hedge fund interest lately. SNDR was in 17 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with SNDR positions at the end of the previous quarter. Our calculations also showed that SNDR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are a multitude of tools stock market investors have at their disposal to evaluate publicly traded companies. A couple of the less utilized tools are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outclass the S&P 500 by a healthy amount (see the details here).
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a peek at the new hedge fund action surrounding Schneider National, Inc. (NYSE:SNDR).
What have hedge funds been doing with Schneider National, Inc. (NYSE:SNDR)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SNDR over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Schneider National, Inc. (NYSE:SNDR), with a stake worth $28.3 million reported as of the end of September. Trailing Millennium Management was Balyasny Asset Management, which amassed a stake valued at $26.5 million. Two Sigma Advisors, Renaissance Technologies, and Marshall Wace 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 Buckingham Capital Management allocated the biggest weight to Schneider National, Inc. (NYSE:SNDR), around 0.76% of its 13F portfolio. Centenus Global Management is also relatively very bullish on the stock, earmarking 0.57 percent of its 13F equity portfolio to SNDR.
Because Schneider National, Inc. (NYSE:SNDR) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there was a specific group of hedge funds that elected to cut their full holdings by the end of the third quarter. Interestingly, David Steinberg and Eric Udoff’s Marlowe Partners said goodbye to the biggest investment of all the hedgies followed by Insider Monkey, totaling an estimated $2.9 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also sold off its stock, about $1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds by the end of the third quarter.
Let’s check out 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 Adaptive Biotechnologies Corporation (NASDAQ:ADPT), Switch, Inc. (NYSE:SWCH), Mantech International Corp (NASDAQ:MANT), and Itau CorpBanca (NYSE:ITCB). This group of stocks’ market valuations are similar to SNDR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADPT | 21 | 2018148 | -17 |
| SWCH | 14 | 322417 | 1 |
| MANT | 14 | 17786 | 3 |
| ITCB | 1 | 3608 | 0 |
| Average | 12.5 | 590490 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $590 million. That figure was $128 million in SNDR’s case. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is the most popular stock in this table. On the other hand Ita? CorpBanca (NYSE:ITCB) is the least popular one with only 1 bullish hedge fund positions. Schneider National, Inc. (NYSE:SNDR) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SNDR wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SNDR were disappointed as the stock returned 4.7% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
