Is JBHT A Good Stock To Buy According To Hedge Funds?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) based on those filings.

Is JBHT a good stock to buy? J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) shareholders have witnessed an increase in hedge fund sentiment in recent months. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) was in 38 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 32. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 24 hedge funds in our database with JBHT holdings at the end of June. Our calculations also showed that JBHT 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.

Andrew Sandler of Sandler Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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 view the key hedge fund action encompassing J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT).

Do Hedge Funds Think JBHT Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2020, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 58% from one quarter earlier. By comparison, 26 hedge funds held shares or bullish call options in JBHT a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

More specifically, Park Presidio Capital was the largest shareholder of J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), with a stake worth $55.6 million reported as of the end of September. Trailing Park Presidio Capital was Millennium Management, which amassed a stake valued at $50 million. AQR Capital Management, GLG Partners, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Park Presidio Capital allocated the biggest weight to J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), around 5.92% of its 13F portfolio. Key Square Capital Management is also relatively very bullish on the stock, setting aside 3.01 percent of its 13F equity portfolio to JBHT.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the biggest position in J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT). Arrowstreet Capital had $20.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $19.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Andrew Sandler’s Sandler Capital Management, and Scott Bessent’s Key Square Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) but similarly valued. We will take a look at HubSpot Inc (NYSE:HUBS), Mid America Apartment Communities Inc (NYSE:MAA), The Hartford Financial Services Group Inc (NYSE:HIG), Teradyne, Inc. (NASDAQ:TER), Elanco Animal Health Incorporated (NYSE:ELAN), Tradeweb Markets Inc. (NASDAQ:TW), and The J.M. Smucker Company (NYSE:SJM). This group of stocks’ market caps match JBHT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HUBS 40 1187421 -1
MAA 27 449666 -3
HIG 36 966601 -3
TER 42 1365348 8
ELAN 21 302734 -9
TW 24 297199 -9
SJM 31 763149 -7
Average 31.6 761731 -3.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.6 hedge funds with bullish positions and the average amount invested in these stocks was $762 million. That figure was $329 million in JBHT’s case. Teradyne, Inc. (NASDAQ:TER) is the most popular stock in this table. On the other hand Elanco Animal Health Incorporated (NYSE:ELAN) is the least popular one with only 21 bullish hedge fund positions. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JBHT is 80.5. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on JBHT, though not to the same extent, as the stock returned 11.4% since Q3 (through December 18th) and outperformed the market as well.

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Disclosure: None. This article was originally published at Insider Monkey.