The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Marten Transport, Ltd (NASDAQ:MRTN) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is Marten Transport, Ltd (NASDAQ:MRTN) a great investment today? The best stock pickers were getting more bullish. The number of bullish hedge fund bets moved up by 3 lately. Marten Transport, Ltd (NASDAQ:MRTN) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistics is 23. Our calculations also showed that MRTN isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Richard Driehaus of Driehaus Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind let’s analyze the recent hedge fund action regarding Marten Transport, Ltd (NASDAQ:MRTN).
What does smart money think about Marten Transport, Ltd (NASDAQ:MRTN)?
At second quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in MRTN a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in Marten Transport, Ltd (NASDAQ:MRTN) was held by Arrowstreet Capital, which reported holding $10.5 million worth of stock at the end of September. It was followed by Empirical Capital Partners with a $9.8 million position. Other investors bullish on the company included 12th Street Asset Management, Driehaus Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Empirical Capital Partners allocated the biggest weight to Marten Transport, Ltd (NASDAQ:MRTN), around 14.03% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, designating 2.58 percent of its 13F equity portfolio to MRTN.
As one would reasonably expect, key money managers have been driving this bullishness. Driehaus Capital, managed by Richard Driehaus, established the most valuable position in Marten Transport, Ltd (NASDAQ:MRTN). Driehaus Capital had $7.6 million invested in the company at the end of the quarter. Renaissance Technologies also made a $2.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Muller’s PDT Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Donald Sussman’s Paloma Partners.
Let’s now review hedge fund activity in other stocks similar to Marten Transport, Ltd (NASDAQ:MRTN). These stocks are Urban Edge Properties (NYSE:UE), Grupo Financiero Galicia S.A. (NASDAQ:GGAL), Two Harbors Investment Corp (NYSE:TWO), Skyline Champion Corporation (NYSE:SKY), Methanex Corporation (NASDAQ:MEOH), GreenTree Hospitality Group Ltd. (NYSE:GHG), and James River Group Holdings Ltd (NASDAQ:JRVR). All of these stocks’ market caps are similar to MRTN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UE | 25 | 104705 | 4 |
| GGAL | 11 | 32517 | 5 |
| TWO | 16 | 44443 | -8 |
| SKY | 23 | 206283 | 0 |
| MEOH | 17 | 74700 | 5 |
| GHG | 5 | 24114 | 1 |
| JRVR | 10 | 105797 | -3 |
| Average | 15.3 | 84651 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $63 million in MRTN’s case. Urban Edge Properties (NYSE:UE) is the most popular stock in this table. On the other hand GreenTree Hospitality Group Ltd. (NYSE:GHG) is the least popular one with only 5 bullish hedge fund positions. Marten Transport, Ltd (NASDAQ:MRTN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MRTN is 67.8. 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 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 24.8% in 2020 through the end of third quarter and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on MRTN as the stock returned 17.6% during Q3 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.
