Were Hedge Funds Right About Old Dominion Freight Line, Inc. (ODFL)?

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 second 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 6 years and analyze what the smart money thinks of Old Dominion Freight Line, Inc. (NASDAQ:ODFL) based on that data.

Old Dominion Freight Line, Inc. (NASDAQ:ODFL) has experienced an increase in activity from the world’s largest hedge funds lately. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) was in 47 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 50. There were 40 hedge funds in our database with ODFL positions at the end of the first quarter. Our calculations also showed that ODFL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s go over the fresh hedge fund action regarding Old Dominion Freight Line, Inc. (NASDAQ:ODFL).

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

At second quarter’s end, a total of 47 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ODFL over the last 24 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

More specifically, AQR Capital Management was the largest shareholder of Old Dominion Freight Line, Inc. (NASDAQ:ODFL), with a stake worth $234.1 million reported as of the end of June. Trailing AQR Capital Management was Echo Street Capital Management, which amassed a stake valued at $121.5 million. Citadel Investment Group, Osterweis Capital Management, and Bridgewater Associates 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 Aubrey Capital Management allocated the biggest weight to Old Dominion Freight Line, Inc. (NASDAQ:ODFL), around 1.78% of its 13F portfolio. Osterweis Capital Management is also relatively very bullish on the stock, setting aside 1.73 percent of its 13F equity portfolio to ODFL.

As one would reasonably expect, some big names were breaking ground themselves. Shellback Capital, managed by Doug Gordon, Jon Hilsabeck and Don Jabro, created the largest position in Old Dominion Freight Line, Inc. (NASDAQ:ODFL). Shellback Capital had $15.2 million invested in the company at the end of the quarter. John Brennan’s Sirios Capital Management also made a $12.4 million investment in the stock during the quarter. The other funds with brand new ODFL positions are Michael Gelband’s ExodusPoint Capital, Clint Carlson’s Carlson Capital, and Benjamin A. Smith’s Laurion Capital Management.

Let’s now review hedge fund activity in other stocks similar to Old Dominion Freight Line, Inc. (NASDAQ:ODFL). We will take a look at ViacomCBS Inc. (NASDAQ:VIAC), Occidental Petroleum Corporation (NYSE:OXY), Equifax Inc. (NYSE:EFX), AvalonBay Communities Inc (NYSE:AVB), Arthur J. Gallagher & Co. (NYSE:AJG), Ameriprise Financial, Inc. (NYSE:AMP), and EPAM Systems Inc (NYSE:EPAM). All of these stocks’ market caps match ODFL’s market cap.

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As you can see these stocks had an average of 43 hedge funds with bullish positions and the average amount invested in these stocks was $1602 million. That figure was $673 million in ODFL’s case. ViacomCBS Inc. (NASDAQ:VIAC) is the most popular stock in this table. On the other hand AvalonBay Communities Inc (NYSE:AVB) is the least popular one with only 26 bullish hedge fund positions. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ODFL is 61.5. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 through November 5th and still beat the market by 3.1 percentage points. Hedge funds were also right about betting on ODFL as the stock returned 37.5% since the end of Q2 (through 11/5) 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.