With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Wabash National Corporation (NYSE:WNC).
Is WNC a good stock to buy now? Money managers were becoming hopeful. The number of long hedge fund positions inched up by 3 in recent months. Wabash National Corporation (NYSE:WNC) was in 18 hedge funds’ portfolios at the end of September. The all time high for this statistic is 24. Our calculations also showed that WNC 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 15 hedge funds in our database with WNC holdings at the end of June.
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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 glance at the latest hedge fund action regarding Wabash National Corporation (NYSE:WNC).
Do Hedge Funds Think WNC Is A Good Stock To Buy Now?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WNC over the last 21 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Wabash National Corporation (NYSE:WNC), with a stake worth $17.7 million reported as of the end of September. Trailing Renaissance Technologies was Royce & Associates, which amassed a stake valued at $12.9 million. Arrowstreet Capital, Rutabaga Capital Management, and Scopus Asset 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 Rutabaga Capital Management allocated the biggest weight to Wabash National Corporation (NYSE:WNC), around 2.36% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, setting aside 0.17 percent of its 13F equity portfolio to WNC.
Consequently, some big names were breaking ground themselves. Rutabaga Capital Management, managed by Peter Schliemann, established the most valuable position in Wabash National Corporation (NYSE:WNC). Rutabaga Capital Management had $4.2 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $3.8 million position during the quarter. The following funds were also among the new WNC investors: Noam Gottesman’s GLG Partners, Donald Sussman’s Paloma Partners, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Wabash National Corporation (NYSE:WNC). We will take a look at The Andersons, Inc. (NASDAQ:ANDE), Colony Credit Real Estate, Inc. (NYSE:CLNC), Neenah Inc. (NYSE:NP), Clearwater Paper Corp (NYSE:CLW), ImmunoGen, Inc. (NASDAQ:IMGN), Betterware de Mexico, S.A. de C.V. (NASDAQ:BWMX), and Jumia Technologies AG (NYSE:JMIA). This group of stocks’ market values are similar to WNC’s market value.
|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 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $59 million in WNC’s case. ImmunoGen, Inc. (NASDAQ:IMGN) is the most popular stock in this table. On the other hand Betterware de Mexico, S.A. de C.V. (NASDAQ:BWMX) is the least popular one with only 2 bullish hedge fund positions. Wabash National Corporation (NYSE:WNC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WNC 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on WNC as the stock returned 42.3% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.