We at Insider Monkey have gone over 821 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 March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Wabash National Corporation (NYSE:WNC) based on that data.
Is Wabash National Corporation (NYSE:WNC) a buy here? Hedge funds are taking an optimistic view. The number of long hedge fund positions rose by 4 lately. Our calculations also showed that WNC isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 58 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. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the new hedge fund action surrounding Wabash National Corporation (NYSE:WNC).
How are hedge funds trading Wabash National Corporation (NYSE:WNC)?
Heading into the second quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. By comparison, 16 hedge funds held shares or bullish call options in WNC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in Wabash National Corporation (NYSE:WNC), worth close to $8.3 million, corresponding to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $7.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism encompass Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Trellus Management Company allocated the biggest weight to Wabash National Corporation (NYSE:WNC), around 0.16% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.06 percent of its 13F equity portfolio to WNC.
Consequently, key hedge funds have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the largest position in Wabash National Corporation (NYSE:WNC). Marshall Wace LLP had $0.7 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $0.5 million position during the quarter. The other funds with brand new WNC positions are Donald Sussman’s Paloma Partners and Adam Usdan’s Trellus Management Company.
Let’s go over hedge fund activity in other stocks similar to Wabash National Corporation (NYSE:WNC). We will take a look at Intersect ENT Inc (NASDAQ:XENT), The Hackett Group, Inc. (NASDAQ:HCKT), AnaptysBio, Inc. (NASDAQ:ANAB), and The Marcus Corporation (NYSE:MCS). This group of stocks’ market values are closest 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 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $27 million in WNC’s case. AnaptysBio, Inc. (NASDAQ:ANAB) is the most popular stock in this table. On the other hand The Marcus Corporation (NYSE:MCS) is the least popular one with only 14 bullish hedge fund positions. Wabash National Corporation (NYSE:WNC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on WNC as the stock returned 40.9% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.