Echo Global Logistics, Inc. (NASDAQ:ECHO) was in 7 hedge funds’ portfolio at the end of the fourth quarter of 2012. ECHO investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. There were 5 hedge funds in our database with ECHO positions at the end of the previous quarter.
In the eyes of most market participants, hedge funds are assumed to be slow, outdated investment vehicles of years past. While there are more than 8000 funds with their doors open at the moment, we look at the moguls of this club, close to 450 funds. Most estimates calculate that this group controls the lion’s share of all hedge funds’ total capital, and by monitoring their highest performing picks, we have uncovered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as key, positive insider trading sentiment is a second way to break down the stock market universe. There are a number of reasons for a bullish insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).
Keeping this in mind, we’re going to take a glance at the recent action encompassing Echo Global Logistics, Inc. (NASDAQ:ECHO).
How are hedge funds trading Echo Global Logistics, Inc. (NASDAQ:ECHO)?
At year’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of 40% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings substantially.
According to our comprehensive database, J. Carlo Cannell’s Cannell Capital had the biggest position in Echo Global Logistics, Inc. (NASDAQ:ECHO), worth close to $6.4 million, comprising 4.8% of its total 13F portfolio. Sitting at the No. 2 spot is Catapult Capital Management, managed by Israel Englander, which held a $2.4 million position; 1.2% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Joel Greenblatt’s Gotham Asset Management.
As industrywide interest jumped, key hedge funds have jumped into Echo Global Logistics, Inc. (NASDAQ:ECHO) headfirst. Catapult Capital Management, managed by Israel Englander, initiated the most valuable position in Echo Global Logistics, Inc. (NASDAQ:ECHO). Catapult Capital Management had 2.4 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.4 million investment in the stock during the quarter.
What do corporate executives and insiders think about Echo Global Logistics, Inc. (NASDAQ:ECHO)?
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, Echo Global Logistics, Inc. (NASDAQ:ECHO) has seen 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Echo Global Logistics, Inc. (NASDAQ:ECHO). These stocks are Arkansas Best Corporation (NASDAQ:ABFS), Universal Truckload Services, Inc. (NASDAQ:UACL), Marten Transport, Ltd (NASDAQ:MRTN), Saia Inc (NASDAQ:SAIA), and Celadon Group, Inc. (NYSE:CGI). This group of stocks are the members of the trucking industry and their market caps are similar to ECHO’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Arkansas Best Corporation (NASDAQ:ABFS) | 10 | 0 | 0 |
| Universal Truckload Services, Inc. (NASDAQ:UACL) | 4 | 2 | 1 |
| Marten Transport, Ltd (NASDAQ:MRTN) | 5 | 0 | 1 |
| Saia Inc (NASDAQ:SAIA) | 13 | 0 | 1 |
| Celadon Group, Inc. (NYSE:CGI) | 10 | 1 | 6 |
With the results demonstrated by our tactics, retail investors must always monitor hedge fund and insider trading activity, and Echo Global Logistics, Inc. (NASDAQ:ECHO) is no exception.
