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Is Covenant Transportation Group, Inc. (CVTI) A Good Stock To Buy?

As one would reasonably expect, key money managers were breaking ground themselves. Alyeska Investment Group, led by Anand Parekh, assembled the most outsized position in Covenant Transportation Group, Inc. (NASDAQ:CVTI). Alyeska Investment Group had $3.4 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $1.4 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s also examine hedge fund activity in other stocks similar to Covenant Transportation Group, Inc. (NASDAQ:CVTI). We will take a look at NQ Mobile Inc (ADR) (NYSE:NQ), Park Electrochemical Corp. (NYSE:PKE), Western Asset High Yield Defined Opportunity Fund Inc. (NYSE:HYI), and OncoMed Pharmaceuticals Inc (NASDAQ:OMED). This group of stocks’ market caps match CVTI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NQ 8 10417 1
PKE 7 80580 0
HYI 1 2363 -1
OMED 14 56730 6

As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $18 million in CVTI’s case. OncoMed Pharmaceuticals Inc (NASDAQ:OMED) is the most popular stock in this table. On the other hand Western Asset High Yield Defined Opportunity Fund Inc. (NYSE:HYI) is the least popular one with only 1 bullish hedge fund positions. Covenant Transportation Group, Inc. (NASDAQ:CVTI) 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. In this regard OMED might be a better candidate to consider taking a long position in.

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Disclosure: None

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