Is Knight-Swift Transportation Holdings Inc. (KNX) A Good Stock To Buy?

We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Knight-Swift Transportation Holdings Inc. (NYSE:KNX) based on that data.

Is KNX a good stock to buy? Knight-Swift Transportation Holdings Inc. (NYSE:KNX) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 52. KNX investors should pay attention to a decrease in hedge fund sentiment in recent months. There were 26 hedge funds in our database with KNX holdings at the end of June. Our calculations also showed that KNX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s go over the recent hedge fund action surrounding Knight-Swift Transportation Holdings Inc. (NYSE:KNX).

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

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the previous quarter. On the other hand, there were a total of 52 hedge funds with a bullish position in KNX a year ago. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

More specifically, AQR Capital Management was the largest shareholder of Knight-Swift Transportation Holdings Inc. (NYSE:KNX), with a stake worth $61.2 million reported as of the end of September. Trailing AQR Capital Management was D E Shaw, which amassed a stake valued at $49.7 million. Citadel Investment Group, 12th Street Asset Management, and PEAK6 Capital Management 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 12th Street Asset Management allocated the biggest weight to Knight-Swift Transportation Holdings Inc. (NYSE:KNX), around 5.04% of its 13F portfolio. Game Creek Capital is also relatively very bullish on the stock, setting aside 3.41 percent of its 13F equity portfolio to KNX.

Because Knight-Swift Transportation Holdings Inc. (NYSE:KNX) has faced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedge funds who sold off their full holdings last quarter. It’s worth mentioning that Israel Englander’s Millennium Management said goodbye to the largest investment of the 750 funds watched by Insider Monkey, totaling an estimated $12.8 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $4.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds last quarter.

Let’s now review hedge fund activity in other stocks similar to Knight-Swift Transportation Holdings Inc. (NYSE:KNX). These stocks are Hyatt Hotels Corporation (NYSE:H), IPG Photonics Corporation (NASDAQ:IPGP), DXC Technology Company (NYSE:DXC), Bright Horizons Family Solutions Inc (NYSE:BFAM), Gerdau SA (NYSE:GGB), Aramark (NYSE:ARMK), and MKS Instruments, Inc. (NASDAQ:MKSI). All of these stocks’ market caps resemble KNX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $568 million. That figure was $262 million in KNX’s case. Hyatt Hotels Corporation (NYSE:H) is the most popular stock in this table. On the other hand Gerdau SA (NYSE:GGB) is the least popular one with only 13 bullish hedge fund positions. Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KNX is 28.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on KNX as the stock returned 19.4% since the end of the third quarter (through 12/31) and outperformed the market by an even larger margin.

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