Echo Global Logistics, Inc. (ECHO) Not Resonating With Top Investors

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors collectively think of Echo Global Logistics, Inc. (NASDAQ:ECHO).

Echo Global Logistics, Inc. (NASDAQ:ECHO) was in 16 hedge funds’ portfolios at the end of the third quarter of 2015. ECHO investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 19 hedge funds in our database with ECHO positions at the end of the second quarter. At the end of this article we will also compare ECHO to other stocks including Navios Maritime Partners L.P. (NYSE:NMM), Photronics, Inc. (NASDAQ:PLAB), and Cavco Industries, Inc. (NASDAQ:CVCO) to get a better sense of its popularity.

If you’d ask most stock holders, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are more than 8,000 funds with their doors open at present, our experts choose to focus on the moguls of this club, around 700 funds. It is estimated that this group of investors orchestrate the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their top stock picks, Insider Monkey has revealed various investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, let’s take a glance at the key action encompassing Echo Global Logistics, Inc. (NASDAQ:ECHO).

What have hedge funds been doing with Echo Global Logistics, Inc. (NASDAQ:ECHO)?

Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 16% drop from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or had already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Scopus Asset Management, managed by Alexander Mitchell, holds the largest position in Echo Global Logistics, Inc. (NASDAQ:ECHO). Scopus Asset Management has a $26.3 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is Luminus Management, managed by Jonathan Barrett and Paul Segal, which holds a $10.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers that are bullish include Ken Brodkowitz and Mike Vermut’s Newland Capital, Ken Griffin’s Citadel Investment Group, and Amy Minella’s Cardinal Capital.

Due to the fact that Echo Global Logistics, Inc. (NASDAQ:ECHO) has experienced a declination in interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers that decided to sell off their full holdings last quarter. At the top of the heap, Anand Parekh’s Alyeska Investment Group sold off the largest position of all the hedgies watched by Insider Monkey, worth about $5.7 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund cut about $4.3 million worth of shares. These moves are intriguing to say the least, as total 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 Echo Global Logistics, Inc. (NASDAQ:ECHO) but similarly valued. We will take a look at Navios Maritime Partners L.P. (NYSE:NMM), Photronics, Inc. (NASDAQ:PLAB), Cavco Industries, Inc. (NASDAQ:CVCO), and Materion Corp (NYSE:MTRN). This group of stocks’ market caps are closest to ECHO’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $73 million in ECHO’s case. Photronics, Inc. (NASDAQ:PLAB) is the most popular stock in this table. On the other hand Navios Maritime Partners L.P. (NYSE:NMM) is the least popular one with only 4 bullish hedge fund positions. Echo Global Logistics, Inc. (NASDAQ:ECHO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PLAB might be a better candidate to consider a long position in.