The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Hub Group Inc (NASDAQ:HUBG).
Is HUBG a good stock to buy now? Prominent investors were taking a pessimistic view. The number of long hedge fund bets were cut by 1 in recent months. Hub Group Inc (NASDAQ:HUBG) was in 20 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 23. Our calculations also showed that HUBG 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. With all of this in mind we’re going to analyze the fresh hedge fund action regarding Hub Group Inc (NASDAQ:HUBG).
Do Hedge Funds Think HUBG Is A Good Stock To Buy Now?
At the end of September, 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 2020. Below, you can check out the change in hedge fund sentiment towards HUBG over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the number one position in Hub Group Inc (NASDAQ:HUBG), worth close to $64.9 million, comprising 0.4% of its total 13F portfolio. Coming in second is Fisher Asset Management, managed by Ken Fisher, which holds a $51.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Renaissance Technologies and Dmitry Balyasny’s Balyasny Asset Management. In terms of the portfolio weights assigned to each position Coe Capital Management allocated the biggest weight to Hub Group Inc (NASDAQ:HUBG), around 0.61% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, designating 0.36 percent of its 13F equity portfolio to HUBG.
Since Hub Group Inc (NASDAQ:HUBG) has experienced a decline in interest from the smart money, logic holds that there lies a certain “tier” of hedge funds that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Ken Griffin’s Citadel Investment Group said goodbye to the biggest investment of the “upper crust” of funds watched by Insider Monkey, worth close to $4.6 million in stock. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also dumped its stock, about $1.3 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks similar to Hub Group Inc (NASDAQ:HUBG). We will take a look at Sunstone Hotel Investors Inc (NYSE:SHO), Sonic Automotive Inc (NYSE:SAH), Piedmont Office Realty Trust, Inc. (NYSE:PDM), Columbia Banking System Inc (NASDAQ:COLB), Oi SA (NYSE:OIBR), CareTrust REIT Inc (NASDAQ:CTRE), and NanoString Technologies Inc (NASDAQ:NSTG). All of these stocks’ market caps are similar to HUBG’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 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $191 million in HUBG’s case. NanoString Technologies Inc (NASDAQ:NSTG) is the most popular stock in this table. On the other hand Oi SA (NYSE:OIBR) is the least popular one with only 6 bullish hedge fund positions. Hub Group Inc (NASDAQ:HUBG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HUBG is 80.1. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on HUBG as the stock returned 12.7% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.