Is Old Dominion Freight Line, Inc. (NASDAQ:ODFL) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the winners in the stock market.
Old Dominion Freight Line, Inc.(NASDAQ:ODFL) investors should be aware of a decrease in hedge fund interest lately. Our calculations also showed that ODFL isn’t among the 30 most popular stocks among hedge funds.
According to most market participants, hedge funds are perceived as unimportant, outdated investment vehicles of yesteryear. While there are over 8000 funds with their doors open at present, Our experts hone in on the moguls of this club, about 750 funds. These hedge fund managers oversee most of the smart money’s total asset base, and by following their highest performing investments, Insider Monkey has deciphered various investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by nearly 5 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
Let’s take a look at the recent hedge fund action encompassing Old Dominion Freight Line, Inc. (NASDAQ:ODFL).
What have hedge funds been doing with Old Dominion Freight Line, Inc. (NASDAQ:ODFL)?
Heading into the first quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ODFL over the last 14 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of Old Dominion Freight Line, Inc. (NASDAQ:ODFL), with a stake worth $68.1 million reported as of the end of September. Trailing AQR Capital Management was Renaissance Technologies, which amassed a stake valued at $47.3 million. Sirios Capital Management, Chilton Investment Company, and Scopus Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as Old Dominion Freight Line, Inc. (NASDAQ:ODFL) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedgies who were dropping their entire stakes in the third quarter. It’s worth mentioning that Peter Muller’s PDT Partners dumped the largest position of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $9.3 million in stock. Ilya Boroditsky’s fund, Precision Path Capital, also dropped its stock, about $4.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Old Dominion Freight Line, Inc. (NASDAQ:ODFL) but similarly valued. We will take a look at Sociedad Química y Minera de Chile S.A. (NYSE:SQM), CF Industries Holdings, Inc. (NYSE:CF), Apollo Global Management LLC (NYSE:APO), and Tableau Software Inc (NYSE:DATA). All of these stocks’ market caps resemble ODFL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SQM | 8 | 56321 | -1 |
| CF | 42 | 923972 | 9 |
| APO | 22 | 1244232 | 0 |
| DATA | 36 | 2250740 | -1 |
| Average | 27 | 1118816 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $1119 million. That figure was $219 million in ODFL’s case. CF Industries Holdings, Inc. (NYSE:CF) is the most popular stock in this table. On the other hand Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is the least popular one with only 8 bullish hedge fund positions. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. A handful of hedge funds were also right about betting on ODFL, though not to the same extent, as the stock returned 19.2% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
