The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Hub Group Inc (NASDAQ:HUBG) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Hub Group Inc (NASDAQ:HUBG) was in 21 hedge funds’ portfolios at the end of September. HUBG has seen an increase in activity from the world’s largest hedge funds lately. There were 20 hedge funds in our database with HUBG positions at the end of the previous quarter. Our calculations also showed that HUBG isn’t among the 30 most popular stocks among hedge funds.
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 18 percentage points since May 2014 through December 3, 2018 (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.
We’re going to analyze the key hedge fund action encompassing Hub Group Inc (NASDAQ:HUBG).
What does the smart money think about Hub Group Inc (NASDAQ:HUBG)?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in HUBG over the last 13 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Diamond Hill Capital was the largest shareholder of Hub Group Inc (NASDAQ:HUBG), with a stake worth $134.8 million reported as of the end of September. Trailing Diamond Hill Capital was Fisher Asset Management, which amassed a stake valued at $64.8 million. Millennium Management, 1060 Capital Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Now, some big names have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the most outsized position in Hub Group Inc (NASDAQ:HUBG). Tudor Investment Corp had $0.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.4 million investment in the stock during the quarter. The other funds with brand new HUBG positions are Brandon Haley’s Holocene Advisors, Matthew Tewksbury’s Stevens Capital Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Hub Group Inc (NASDAQ:HUBG) but similarly valued. We will take a look at Core-Mark Holding Company, Inc. (NASDAQ:CORE), GameStop Corp. (NYSE:GME), Insmed Incorporated (NASDAQ:INSM), and Rush Enterprises, Inc. (NASDAQ:RUSHB). All of these stocks’ market caps match HUBG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CORE | 19 | 89247 | 6 |
| GME | 20 | 118701 | -3 |
| INSM | 17 | 310696 | -3 |
| RUSHB | 5 | 36169 | 1 |
| Average | 15.25 | 138703 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $139 million. That figure was $320 million in HUBG’s case. GameStop Corp. (NYSE:GME) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Hub Group Inc (NASDAQ:HUBG) 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.
Disclosure: None. This article was originally published at Insider Monkey.
