Is RUSHA A Good Stock To Buy Now?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Rush Enterprises, Inc. (NASDAQ:RUSHA) based on that data.

Is RUSHA a good stock to buy now? Rush Enterprises, Inc. (NASDAQ:RUSHA) has experienced a decrease in support from the world’s most elite money managers in recent months. Rush Enterprises, Inc. (NASDAQ:RUSHA) was in 17 hedge funds’ portfolios at the end of September. The all time high for this statistic is 24. Our calculations also showed that RUSHA 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.

Today there are a large number of metrics shareholders have at their disposal to value their stock investments. A couple of the most underrated metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top fund managers can beat the broader indices by a healthy margin (see the details here).

Minhua Zhang of Weld Capital Management

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 let’s take a look at the new hedge fund action regarding Rush Enterprises, Inc. (NASDAQ:RUSHA).

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

At third quarter’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter of 2020. By comparison, 21 hedge funds held shares or bullish call options in RUSHA a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

The largest stake in Rush Enterprises, Inc. (NASDAQ:RUSHA) was held by Renaissance Technologies, which reported holding $25.6 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $13.6 million position. Other investors bullish on the company included Mountaineer Partners Management, First Pacific Advisors LLC, and 12th Street Asset Management. In terms of the portfolio weights assigned to each position Mountaineer Partners Management allocated the biggest weight to Rush Enterprises, Inc. (NASDAQ:RUSHA), around 5.68% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, designating 1.16 percent of its 13F equity portfolio to RUSHA.

Because Rush Enterprises, Inc. (NASDAQ:RUSHA) has witnessed declining sentiment from hedge fund managers, we can see that there was a specific group of money managers who were dropping their positions entirely last quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dumped the biggest position of the “upper crust” of funds monitored by Insider Monkey, totaling close to $0.9 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $0.4 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Rush Enterprises, Inc. (NASDAQ:RUSHA). These stocks are AdaptHealth Corp. (NASDAQ:AHCO), CryoPort, Inc. (NASDAQ:CYRX), Eldorado Gold Corp (NYSE:EGO), Avis Budget Group Inc. (NASDAQ:CAR), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), and Sanmina Corporation (NASDAQ:SANM). This group of stocks’ market values match RUSHA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AHCO 14 251745 2
CYRX 19 162892 7
EGO 15 231959 3
CAR 34 835613 13
SFBS 8 6464 -1
MDGL 15 507679 0
SANM 15 135028 -5
Average 17.1 304483 2.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $304 million. That figure was $72 million in RUSHA’s case. Avis Budget Group Inc. (NASDAQ:CAR) is the most popular stock in this table. On the other hand ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is the least popular one with only 8 bullish hedge fund positions. Rush Enterprises, Inc. (NASDAQ:RUSHA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RUSHA is 42.6. 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. A small number of hedge funds were also right about betting on RUSHA as the stock returned 22.4% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.

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