Hedge Funds Are Piling Into Saia Inc (SAIA)

In this article we will take a look at whether hedge funds think Saia Inc (NASDAQ:SAIA) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Saia Inc (NASDAQ:SAIA) shareholders have witnessed an increase in hedge fund sentiment recently. Saia Inc (NASDAQ:SAIA) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SAIA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Ian Wace of Marshall Wace

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium 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. Now we’re going to take a glance at the new hedge fund action regarding Saia Inc (NASDAQ:SAIA).

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

At the end of the second quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SAIA over the last 24 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.

According to Insider Monkey’s hedge fund database, Select Equity Group, managed by Robert Joseph Caruso, holds the biggest position in Saia Inc (NASDAQ:SAIA). Select Equity Group has a $265.5 million position in the stock, comprising 0.9% of its 13F portfolio. On Select Equity Group’s heels is Israel Englander of Millennium Management, with a $47.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish include Dmitry Balyasny’s Balyasny Asset Management, Chuck Royce’s Royce & Associates and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Select Equity Group allocated the biggest weight to Saia Inc (NASDAQ:SAIA), around 0.91% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, earmarking 0.59 percent of its 13F equity portfolio to SAIA.

As one would reasonably expect, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the biggest position in Saia Inc (NASDAQ:SAIA). Millennium Management had $47.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $2.9 million investment in the stock during the quarter. The other funds with brand new SAIA positions are Renaissance Technologies, Robert Vincent McHugh’s Jade Capital Advisors, and Michael Gelband’s ExodusPoint Capital.

Let’s go over hedge fund activity in other stocks similar to Saia Inc (NASDAQ:SAIA). These stocks are Olo Inc. (NYSE:OLO), Chindata Group Holdings Limited (NASDAQ:CD), Spirit Realty Capital Inc (NYSE:SRC), Vontier Corporation (NYSE:VNT), Helen of Troy Limited (NASDAQ:HELE), Surgery Partners, Inc. (NASDAQ:SGRY), and Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI). This group of stocks’ market values resemble SAIA’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $251 million. That figure was $418 million in SAIA’s case. Vontier Corporation (NYSE:VNT) is the most popular stock in this table. On the other hand Chindata Group Holdings Limited (NASDAQ:CD) is the least popular one with only 10 bullish hedge fund positions. Saia Inc (NASDAQ:SAIA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SAIA is 65. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on SAIA as the stock returned 29.7% since the end of Q2 (through 10/22) 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.