Do Hedge Funds Love USA Truck, Inc. (USAK)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of USA Truck, Inc. (NASDAQ:USAK).

USA Truck, Inc. (NASDAQ:USAK) has seen a decrease in hedge fund sentiment lately. USA Truck, Inc. (NASDAQ:USAK) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 15. There were 6 hedge funds in our database with USAK holdings at the end of December. Our calculations also showed that USAK isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. Now we’re going to take a look at the key hedge fund action encompassing USA Truck, Inc. (NASDAQ:USAK).

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

At first quarter’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -50% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in USAK over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in USA Truck, Inc. (NASDAQ:USAK) was held by Renaissance Technologies, which reported holding $3.3 million worth of stock at the end of December. It was followed by Two Sigma Advisors with a $0.9 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

Due to the fact that USA Truck, Inc. (NASDAQ:USAK) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds who were dropping their entire stakes last quarter. At the top of the heap, Israel Englander’s Millennium Management dumped the largest stake of the 750 funds monitored by Insider Monkey, totaling close to $0.3 million in stock, and D. E. Shaw’s D E Shaw was right behind this move, as the fund said goodbye to about $0.2 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as USA Truck, Inc. (NASDAQ:USAK) but similarly valued. These stocks are Amtech Systems, Inc. (NASDAQ:ASYS), Concord Medical Services Hldg Ltd (NYSE:CCM), The Eastern Company (NASDAQ:EML), Genie Energy Ltd (NYSE:GNE), COMSovereign Holding Corp. (NASDAQ:COMS), LMP Automotive Holdings, Inc. (NASDAQ:LMPX), and Potbelly Corp (NASDAQ:PBPB). All of these stocks’ market caps match USAK’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $5 million in USAK’s case. Amtech Systems, Inc. (NASDAQ:ASYS) is the most popular stock in this table. On the other hand Concord Medical Services Hldg Ltd (NYSE:CCM) is the least popular one with only 2 bullish hedge fund positions. USA Truck, Inc. (NASDAQ:USAK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for USAK is 13. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately USAK wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); USAK investors were disappointed as the stock returned -13.9% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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