Is J.B. Hunt Transport Services, Inc. (JBHT) A Good Stock To Buy?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT).

Is JBHT a good stock to buy? J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that JBHT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s review the latest hedge fund action regarding J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT).

Clint Carlson of Carlson Capital

Do Hedge Funds Think JBHT Is A Good Stock To Buy Now?

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in JBHT over the last 25 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

The largest stake in J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) was held by Park Presidio Capital, which reported holding $82.8 million worth of stock at the end of September. It was followed by AQR Capital Management with a $70.8 million position. Other investors bullish on the company included Holocene Advisors, Millennium Management, and Bridgewater Associates. In terms of the portfolio weights assigned to each position Park Presidio Capital allocated the biggest weight to J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), around 8.33% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, dishing out 2.22 percent of its 13F equity portfolio to JBHT.

Due to the fact that J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) has witnessed a decline in interest from hedge fund managers, logic holds that there was a specific group of fund managers that decided to sell off their positions entirely last quarter. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management said goodbye to the biggest stake of the “upper crust” of funds tracked by Insider Monkey, valued at close to $32.4 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also dropped its stock, about $20 million worth. These transactions are interesting, as total hedge fund interest dropped by 4 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) but similarly valued. These stocks are Pembina Pipeline Corp (NYSE:PBA), Western Digital Corporation (NASDAQ:WDC), Pool Corporation (NASDAQ:POOL), Shinhan Financial Group Co., Ltd. (NYSE:SHG), Rollins, Inc. (NYSE:ROL), Genuine Parts Company (NYSE:GPC), and Nuance Communications Inc. (NASDAQ:NUAN). This group of stocks’ market valuations match JBHT’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.6 hedge funds with bullish positions and the average amount invested in these stocks was $1173 million. That figure was $315 million in JBHT’s case. Nuance Communications Inc. (NASDAQ:NUAN) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 6 bullish hedge fund positions. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JBHT is 32.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on JBHT as the stock returned 22.4% since the end of the third quarter (through 12/31) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.