Hedge Funds Are Souring On Werner Enterprises, Inc. (WERN)

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Werner Enterprises, Inc. (NASDAQ:WERN).

Werner Enterprises, Inc. (NASDAQ:WERN) has experienced a decrease in support from the world’s most elite money managers recently. Werner Enterprises, Inc. (NASDAQ:WERN) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic is 32. There were 21 hedge funds in our database with WERN positions at the end of the first quarter. Our calculations also showed that WERN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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Minhua Zhang of Weld Capital Management

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. Keeping this in mind we’re going to take a look at the key hedge fund action regarding Werner Enterprises, Inc. (NASDAQ:WERN).

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

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WERN over the last 24 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

Among these funds, AQR Capital Management held the most valuable stake in Werner Enterprises, Inc. (NASDAQ:WERN), which was worth $50.3 million at the end of the second quarter. On the second spot was GLG Partners which amassed $42.5 million worth of shares. D E Shaw, Royce & Associates, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position 12th Street Asset Management allocated the biggest weight to Werner Enterprises, Inc. (NASDAQ:WERN), around 1.81% of its 13F portfolio. Sandbar Asset Management is also relatively very bullish on the stock, dishing out 1.07 percent of its 13F equity portfolio to WERN.

Due to the fact that Werner Enterprises, Inc. (NASDAQ:WERN) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few funds that slashed their entire stakes by the end of the second quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest position of all the hedgies watched by Insider Monkey, worth about $0.8 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund dropped about $0.7 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds by the end of the second quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Werner Enterprises, Inc. (NASDAQ:WERN) but similarly valued. We will take a look at Skyline Champion Corporation (NYSE:SKY), CNX Resources Corporation (NYSE:CNX), Alamos Gold Inc (NYSE:AGI), Kennametal Inc. (NYSE:KMT), Hilltop Holdings Inc. (NYSE:HTH), Jumia Technologies AG (NYSE:JMIA), and Berkeley Lights, Inc. (NASDAQ:BLI). This group of stocks’ market caps are similar to WERN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $296 million. That figure was $203 million in WERN’s case. CNX Resources Corporation (NYSE:CNX) is the most popular stock in this table. On the other hand Hilltop Holdings Inc. (NYSE:HTH) is the least popular one with only 8 bullish hedge fund positions. Werner Enterprises, Inc. (NASDAQ:WERN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WERN is 50. 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 WERN as the stock returned 6% 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.