Here is What Hedge Funds Think About Heartland Express, Inc. (HTLD)

The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Heartland Express, Inc. (NASDAQ:HTLD) from the perspective of those successful funds.

Heartland Express, Inc. (NASDAQ:HTLD) investors should be aware of an increase in hedge fund sentiment recently. There were 11 hedge funds in our database with HTLD positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as NIC Inc. (NASDAQ:EGOV), Descartes Systems Group (USA) (NASDAQ:DSGX), and Power Integrations Inc (NASDAQ:POWI) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

IM_photo/Shutterstock.com

With all of this in mind, let’s review the key action encompassing Heartland Express, Inc. (NASDAQ:HTLD).

What have hedge funds been doing with Heartland Express, Inc. (NASDAQ:HTLD)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 27% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in HTLD heading into this year. So, let’s examine 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, Fisher Asset Management, led by Ken Fisher, holds the biggest position in Heartland Express, Inc. (NASDAQ:HTLD). According to regulatory filings, the fund has a $42.5 million position in the stock. Sitting at the No. 2 spot is Folger Hill Asset Management, led by Solomon Kumin, which holds a $6.1 million position. Some other hedge funds and institutional investors that are bullish contain Ken Griffin’s Citadel Investment Group, Greg Poole’s Echo Street Capital Management and Joel Greenblatt’s Gotham Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As one would reasonably expect, key money managers were breaking ground themselves. Ken Griffin’s Citadel Investment Group initiated a $5.5 million position during the quarter. The other funds with new positions in Heartland Express, Inc. (NASDAQ:HTLD) are Greg Poole’s Echo Street Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s also examine hedge fund activity in other stocks similar to Heartland Express, Inc. (NASDAQ:HTLD). We will take a look at NIC Inc. (NASDAQ:EGOV), Descartes Systems Group (USA) (NASDAQ:DSGX), Power Integrations Inc (NASDAQ:POWI), and Plexus Corp. (NASDAQ:PLXS). This group of stocks’ market valuations are similar to HTLD’s market valuation.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $66 million in HTLD’s case. Plexus Corp. (NASDAQ:PLXS) is the most popular stock in this table. On the other hand Descartes Systems Group (USA) (NASDAQ:DSGX) is the least popular one with only 4 bullish hedge fund positions. Heartland Express, Inc. (NASDAQ:HTLD) 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 PLXS might be a better candidate to consider taking a long position in.

Disclosure: None