A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Daseke, Inc. (NASDAQ:DSKE).
Is DSKE a good stock to buy now? Prominent investors were in a bullish mood. The number of bullish hedge fund positions went up by 2 lately. Daseke, Inc. (NASDAQ:DSKE) was in 11 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 21. Our calculations also showed that DSKE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s take a look at the latest hedge fund action regarding Daseke, Inc. (NASDAQ:DSKE).
Do Hedge Funds Think DSKE Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards DSKE over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, George McCabe’s Portolan Capital Management has the largest position in Daseke, Inc. (NASDAQ:DSKE), worth close to $5.6 million, corresponding to 0.6% of its total 13F portfolio. Coming in second is Renaissance Technologies, holding a $4.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Portolan Capital Management allocated the biggest weight to Daseke, Inc. (NASDAQ:DSKE), around 0.64% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to DSKE.
As aggregate interest increased, specific money managers have been driving this bullishness. Engineers Gate Manager, managed by Greg Eisner, assembled the largest position in Daseke, Inc. (NASDAQ:DSKE). Engineers Gate Manager had $0.2 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new DSKE position is D. E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks similar to Daseke, Inc. (NASDAQ:DSKE). These stocks are ANI Pharmaceuticals Inc (NASDAQ:ANIP), Hemisphere Media Group Inc (NASDAQ:HMTV), Luxfer Holdings PLC (NYSE:LXFR), International General Insurance Holdings Ltd. (NASDAQ:IGIC), Comtech Telecommunications Corp. (NASDAQ:CMTL), Cadiz Inc (NASDAQ:CDZI), and Experience Investment Corp. (NASDAQ:EXPC). This group of stocks’ market caps resemble DSKE’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.4 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $16 million in DSKE’s case. Experience Investment Corp. (NASDAQ:EXPC) is the most popular stock in this table. On the other hand Hemisphere Media Group Inc (NASDAQ:HMTV) is the least popular one with only 6 bullish hedge fund positions. Daseke, Inc. (NASDAQ:DSKE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DSKE is 41.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on DSKE as the stock returned 29.6% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.