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Hedge Funds’ Favorite Freight and Logistics Stocks

The freight and logistics industry is the backbone of any economy. Unlike other industries, where it’s usually hard to accurately predict how the changing macros will affect their business, the fortunes of the logistics industry are always in direct correlation with the health of the economy. Due to such direct correlation , large macro investors generally prefer the freight and logistics sector over most other sectors when it comes to placing their bets. Since at Insider Monkey a large number of the investors that we track fall under the category of macro hedge funds, we regularly cover the logistics sectors and identify the most popular stocks within that sector among hedge funds every quarter. This post is one such exercise. Read further, to know which were the five most popular freight and logistics stocks among hedge funds heading into the second quarter.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).

#5. YRC Worldwide Inc (NASDAQ:YRCW)

– Investors with long positions (as of March 31): 23

– Aggregate value of investors’ holdings (as of March 31): $90.66 Million

YRC Worldwide Inc (NASDAQ:YRCW) saw a major drop in its popularity among hedge funds tracked by us during the first quarter. However, that drop wasn’t in terms of the numbers of funds that held a stake in the company, which came down by only by three, but in terms of the aggregate value of their holdings, which saw a decline of over 50%. A large part of that decline in the aggregate value of hedge fund’s holdings in the company during the first quarter can be attributed to the 35% decline in YRC Worldwide Inc (NASDAQ:YRCW)’s stock the same period. Hedge funds that reduced their stakes in the company during the first quarter included Marc Lasry‘s Avenue Capital, which brought its holding down by 19% to nearly 4.8 million shares. On May 2, analysts at Deutsche Bank reiterated their ‘Buy’ rating on the stock, but lowered their price target on it to $16 from $20.

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