Here is What Hedge Funds Think About YRC Worldwide, Inc. (YRCW)

Does YRC Worldwide, Inc. (NASDAQ:YRCW) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

YRC Worldwide, Inc. (NASDAQ:YRCW) investors should be aware of an increase in activity from the world’s largest hedge funds of late. YRCW was in 27 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with YRCW holdings 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 Eclipse Resources Corp (NYSE:ECR), SunCoke Energy Partners LP (NYSE:SXCP), and Imprivata Inc (NYSE:IMPR) to gather more data points.

At the moment there are plenty of indicators investors put to use to analyze their holdings. A duo of the less utilized indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the S&P 500 by a superb amount (see the details here).

Keeping this in mind, we’re going to check out the recent action surrounding YRC Worldwide, Inc. (NASDAQ:YRCW).

How have hedgies been trading YRC Worldwide, Inc. (NASDAQ:YRCW)?

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the second quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Avenue Capital, managed by Marc Lasry, holds the biggest position in YRC Worldwide, Inc. (NASDAQ:YRCW). Avenue Capital has a $77.9 million position in the stock, comprising 12.4% of its 13F portfolio. The second largest stake is held by Amici Capital, led by Paul Orlin and Alex Porter, holding a $24.3 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Mike Masters’ Masters Capital Management, Frank Brosens’ Taconic Capital, and Richard Mashaal’s Rima Senvest Management.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. D E Shaw, managed by D. E. Shaw, created the largest position in YRC Worldwide, Inc. (NASDAQ:YRCW). D E Shaw had $3.1 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also initiated a $1.6 million position during the quarter. The following funds were also among the new YRCW investors: Ken Brodkowitz and Mike Vermut’s Newland Capital, Ira Unschuld’s Brant Point Investment Management, and Mike Vranos’ Ellington.

Let’s now review hedge fund activity in other stocks similar to YRC Worldwide, Inc. (NASDAQ:YRCW). These stocks are Eclipse Resources Corp (NYSE:ECR), SunCoke Energy Partners LP (NYSE:SXCP), Imprivata Inc (NYSE:IMPR), and Applied Micro Circuits Corporation (NASDAQ:AMCC). This group of stocks’ market valuations are similar to YRCW’s market valuation.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $51 million, significantly lower than the $214 million figure in YRCW’s case. Imprivata Inc (NYSE:IMPR) is the most popular stock in this table with a total of 15 funds reporting long positions. On the other hand SunCoke Energy Partners LP (NYSE:SXCP) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks YRC Worldwide, Inc. (NASDAQ:YRCW) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.