A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31, so let’s proceed with the discussion of the hedge fund sentiment on Ryder System, Inc. (NYSE:R).
Hedge fund interest in Ryder System, Inc. (NYSE:R) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare R to other stocks including Qutoutiao Inc. (NASDAQ:QTT), Omnicell, Inc. (NASDAQ:OMCL), and Azul S.A. (NYSE:AZUL) to get a better sense of its popularity.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s analyze the recent hedge fund action surrounding Ryder System, Inc. (NYSE:R).
What have hedge funds been doing with Ryder System, Inc. (NYSE:R)?
Heading into the second quarter of 2019, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards R over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Ryder System, Inc. (NYSE:R) was held by Pzena Investment Management, which reported holding $134.6 million worth of stock at the end of March. It was followed by Luminus Management with a $114.8 million position. Other investors bullish on the company included Scopus Asset Management, AQR Capital Management, and Two Sigma Advisors.
Because Ryder System, Inc. (NYSE:R) has faced a decline in interest from the smart money, we can see that there is a sect of hedge funds that decided to sell off their positions entirely heading into Q3. At the top of the heap, Clint Carlson’s Carlson Capital dropped the biggest investment of all the hedgies followed by Insider Monkey, valued at an estimated $36.1 million in stock, and Sara Nainzadeh’s Centenus Global Management was right behind this move, as the fund sold off about $4.2 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Ryder System, Inc. (NYSE:R). These stocks are Qutoutiao Inc. (NASDAQ:QTT), Omnicell, Inc. (NASDAQ:OMCL), Azul S.A. (NYSE:AZUL), and Outfront Media Inc (NYSE:OUT). All of these stocks’ market caps resemble R’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| QTT | 5 | 6780 | 4 |
| OMCL | 15 | 78492 | 2 |
| AZUL | 12 | 151033 | 1 |
| OUT | 25 | 334752 | 8 |
| Average | 14.25 | 142764 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $380 million in R’s case. Outfront Media Inc (NYSE:OUT) is the most popular stock in this table. On the other hand Qutoutiao Inc. (NASDAQ:QTT) is the least popular one with only 5 bullish hedge fund positions. Ryder System, Inc. (NYSE:R) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately R wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on R were disappointed as the stock returned -7.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
