You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros and Seth Klarman hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Schneider National, Inc. (NYSE:SNDR) the right investment to pursue these days? Prominent investors are becoming more confident. The number of bullish hedge fund bets inched up by 1 recently. Our calculations also showed that sndr isn’t among the 30 most popular stocks among hedge funds.
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 market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the recent hedge fund action surrounding Schneider National, Inc. (NYSE:SNDR).
What have hedge funds been doing with Schneider National, Inc. (NYSE:SNDR)?
Heading into the first quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in SNDR over the last 14 quarters. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Schneider National, Inc. (NYSE:SNDR), with a stake worth $25.9 million reported as of the end of September. Trailing Millennium Management was Two Sigma Advisors, which amassed a stake valued at $16.4 million. Marshall Wace LLP, Renaissance Technologies, and Gotham Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, key money managers have jumped into Schneider National, Inc. (NYSE:SNDR) headfirst. Point72 Asset Management, managed by Steve Cohen, assembled the largest position in Schneider National, Inc. (NYSE:SNDR). Point72 Asset Management had $2.7 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $1.3 million position during the quarter. The following funds were also among the new SNDR investors: David Steinberg and Eric Udoff’s Marlowe Partners, Hoon Kim’s Quantinno Capital, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Schneider National, Inc. (NYSE:SNDR) but similarly valued. These stocks are Taro Pharmaceutical Industries Ltd. (NYSE:TARO), Graphic Packaging Holding Company (NYSE:GPK), OneMain Holdings Inc (NYSE:OMF), and Associated Banc-Corp (NYSE:ASB). This group of stocks’ market values are closest to SNDR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TARO | 8 | 61336 | -6 |
| GPK | 20 | 636989 | -5 |
| OMF | 22 | 239773 | -4 |
| ASB | 18 | 220502 | 1 |
| Average | 17 | 289650 | -3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $290 million. That figure was $93 million in SNDR’s case. OneMain Holdings Inc (NYSE:OMF) is the most popular stock in this table. On the other hand Taro Pharmaceutical Industries Ltd. (NYSE:TARO) is the least popular one with only 8 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately SNDR wasn’t nearly as popular as these 15 stock and hedge funds that were betting on SNDR were disappointed as the stock returned 16.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
