To many market players, hedge funds are seen as useless, old investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds with their doors open in present day, Insider Monkey aim at the crème de la crème of this club, about 525 funds. It is widely held that this group has its hands on the lion’s share of the hedge fund industry’s total assets, and by keeping an eye on their highest quality stock picks, we’ve unsheathed a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as necessary, bullish insider trading activity is another way to look at the marketplace. As the old adage goes: there are plenty of incentives for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this strategy if investors understand where to look (learn more here).
Furthermore, let’s study the newest info about Roadrunner Transportation Systems Inc (NYSE:RRTS).
How have hedgies been trading Roadrunner Transportation Systems Inc (NYSE:RRTS)?
In preparation for the third quarter, a total of 8 of the hedge funds we track were long in this stock, a change of -38% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly.
Since Roadrunner Transportation Systems Inc (NYSE:RRTS) has witnessed declining interest from the top-tier hedge fund industry, it’s safe to say that there were a few hedgies who sold off their positions entirely heading into Q2. Interestingly, Alexander Mitchell’s Scopus Asset Management dumped the largest investment of the 450+ funds we key on, totaling an estimated $7.6 million in stock. Richard S. Meisenberg’s fund, ACK Asset Management, also dropped its stock, about $4 million worth. These moves are interesting, as total hedge fund interest fell by 5 funds heading into Q2.
Insider trading activity in Roadrunner Transportation Systems Inc (NYSE:RRTS)
Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time period, Roadrunner Transportation Systems Inc (NYSE:RRTS) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Roadrunner Transportation Systems Inc (NYSE:RRTS). These stocks are XPO Logistics Inc (NYSE:XPO), Air Transport Services Group Inc. (NASDAQ:ATSG), UTi Worldwide Inc. (NASDAQ:UTIW), Hub Group Inc (NASDAQ:HUBG), and Forward Air Corporation (NASDAQ:FWRD). This group of stocks are the members of the air delivery & freight services industry and their market caps are closest to RRTS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| XPO Logistics Inc (NYSE:XPO) | 9 | 0 | 0 |
| Air Transport Services Group Inc. (NASDAQ:ATSG) | 12 | 0 | 0 |
| UTi Worldwide Inc. (NASDAQ:UTIW) | 11 | 0 | 0 |
| Hub Group Inc (NASDAQ:HUBG) | 10 | 0 | 0 |
| Forward Air Corporation (NASDAQ:FWRD) | 7 | 0 | 0 |
Using the returns demonstrated by the previously mentioned tactics, regular investors should always watch hedge fund and insider trading sentiment, and Roadrunner Transportation Systems Inc (NYSE:RRTS) is an important part of this process.
