At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Radiant Logistics, Inc. (NYSE:RLGT).
Is RLGT a good stock to buy now? The smart money was getting more optimistic. The number of long hedge fund positions inched up by 4 in recent months. Radiant Logistics, Inc. (NYSE:RLGT) was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RLGT 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). There were 10 hedge funds in our database with RLGT positions at the end of the second quarter.
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.
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 we’re going to take a look at the new hedge fund action encompassing Radiant Logistics, Inc. (NYSE:RLGT).
Do Hedge Funds Think RLGT Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in RLGT a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Ancora Advisors was the largest shareholder of Radiant Logistics, Inc. (NYSE:RLGT), with a stake worth $3.6 million reported as of the end of September. Trailing Ancora Advisors was Royce & Associates, which amassed a stake valued at $3.4 million. Arrowstreet Capital, Renaissance Technologies, and Diametric 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 Zebra Capital Management allocated the biggest weight to Radiant Logistics, Inc. (NYSE:RLGT), around 0.47% of its 13F portfolio. Diametric Capital is also relatively very bullish on the stock, setting aside 0.45 percent of its 13F equity portfolio to RLGT.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Diametric Capital, managed by Nick Thakore, established the most valuable position in Radiant Logistics, Inc. (NYSE:RLGT). Diametric Capital had $0.6 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Roger Ibbotson’s Zebra Capital Management, Thomas Bailard’s Bailard Inc, and Peter Algert’s Algert Global.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Radiant Logistics, Inc. (NYSE:RLGT) but similarly valued. We will take a look at Peoples Financial Services Corp. (NASDAQ:PFIS), Berry Corporation (NASDAQ:BRY), Veritone, Inc. (NASDAQ:VERI), Trilogy Metals Inc. (NYSE:TMQ), CalAmp Corp. (NASDAQ:CAMP), Hanmi Financial Corp (NASDAQ:HAFC), and CNB Financial Corporation (NASDAQ:CCNE). All of these stocks’ market caps are closest to RLGT’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 8.9 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $12 million in RLGT’s case. Berry Corporation (NASDAQ:BRY) is the most popular stock in this table. On the other hand Peoples Financial Services Corp. (NASDAQ:PFIS) is the least popular one with only 1 bullish hedge fund positions. Radiant Logistics, Inc. (NYSE:RLGT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RLGT is 89. 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 RLGT as the stock returned 26.3% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.