Is Radiant Logistics, Inc. (NYSE:RLGT) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Radiant Logistics, Inc. (NYSE:RLGT) going to take off soon? Prominent investors are in an optimistic mood. The number of long hedge fund positions rose by 2 lately. Our calculations also showed that RLGT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). RLGT was in 14 hedge funds’ portfolios at the end of the third quarter of 2019. There were 12 hedge funds in our database with RLGT positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. We’re going to take a look at the latest hedge fund action encompassing Radiant Logistics, Inc. (NYSE:RLGT).
Hedge fund activity in Radiant Logistics, Inc. (NYSE:RLGT)
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 10 hedge funds with a bullish position in RLGT a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Frederick DiSanto’s Ancora Advisors has the most valuable position in Radiant Logistics, Inc. (NYSE:RLGT), worth close to $3.7 million, accounting for 0.2% of its total 13F portfolio. Coming in second is Venator Capital Management, led by Brandon Osten, holding a $2.2 million position; 1.9% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Renaissance Technologies. In terms of the portfolio weights assigned to each position Venator Capital Management allocated the biggest weight to Radiant Logistics, Inc. (NYSE:RLGT), around 1.93% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, designating 0.16 percent of its 13F equity portfolio to RLGT.
Consequently, key money managers were leading the bulls’ herd. Venator Capital Management, managed by Brandon Osten, initiated the most outsized position in Radiant Logistics, Inc. (NYSE:RLGT). Venator Capital Management had $2.2 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.2 million position during the quarter. The only other fund with a brand new RLGT position is Paul Marshall and Ian Wace’s Marshall Wace.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Radiant Logistics, Inc. (NYSE:RLGT) but similarly valued. These stocks are Adesto Technologies Corporation (NASDAQ:IOTS), Amplify Energy Corp. (NYSE:AMPY), Atlantic Power Corp (NYSE:AT), and Cincinnati Bell Inc. (NYSE:CBB). This group of stocks’ market values are similar to RLGT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IOTS | 14 | 54092 | 6 |
| AMPY | 22 | 113577 | 22 |
| AT | 12 | 27905 | 0 |
| CBB | 13 | 23380 | 2 |
| Average | 15.25 | 54739 | 7.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $12 million in RLGT’s case. Amplify Energy Corp. (NYSE:AMPY) is the most popular stock in this table. On the other hand Atlantic Power Corp (NYSE:AT) is the least popular one with only 12 bullish hedge fund positions. Radiant Logistics, Inc. (NYSE:RLGT) is not the least popular stock in this group but hedge fund interest is still below average. 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 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 RLGT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); RLGT investors were disappointed as the stock returned 3.5% during the first two months of the fourth quarter 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
