Is Rush Enterprises, Inc. (RUSHA) A Good Stock To Buy?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Rush Enterprises, Inc. (NASDAQ:RUSHA) was in 20 hedge funds’ portfolios at the end of the third quarter of 2018. RUSHA shareholders have witnessed an increase in hedge fund interest lately. There were 19 hedge funds in our database with RUSHA positions at the end of the previous quarter. Our calculations also showed that rusha isn’t among the 30 most popular stocks among hedge funds.

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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Let’s review the new hedge fund action encompassing Rush Enterprises, Inc. (NASDAQ:RUSHA).

How have hedgies been trading Rush Enterprises, Inc. (NASDAQ:RUSHA)?

At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards RUSHA over the last 13 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with RUSHA Positions

The largest stake in Rush Enterprises, Inc. (NASDAQ:RUSHA) was held by Renaissance Technologies, which reported holding $31.2 million worth of stock at the end of September. It was followed by Park West Asset Management with a $21.6 million position. Other investors bullish on the company included Marshall Wace LLP, Millennium Management, and ACK Asset Management.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the biggest position in Rush Enterprises, Inc. (NASDAQ:RUSHA). Marshall Wace LLP had $15.1 million invested in the company at the end of the quarter. Charles Paquelet’s Skylands Capital also made a $1.5 million investment in the stock during the quarter. The following funds were also among the new RUSHA investors: Brandon Haley’s Holocene Advisors and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now review hedge fund activity in other stocks similar to Rush Enterprises, Inc. (NASDAQ:RUSHA). These stocks are TherapeuticsMD Inc (NASDAQ:TXMD), TiVo Corporation (NASDAQ:TIVO), EnPro Industries, Inc. (NYSE:NPO), and Inovalon Holdings Inc (NASDAQ:INOV). This group of stocks’ market values are similar to RUSHA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TXMD 14 76456 6
TIVO 18 111313 1
NPO 16 137214 6
INOV 13 23987 1
Average 15.25 87243 3.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $150 million in RUSHA’s case. TiVo Corporation (NASDAQ:TIVO) is the most popular stock in this table. On the other hand Inovalon Holdings Inc (NASDAQ:INOV) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Rush Enterprises, Inc. (NASDAQ:RUSHA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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