Is KNX Stock A Buy or Sell?

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 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Knight-Swift Transportation Holdings Inc. (NYSE:KNX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is KNX stock a buy? Money managers were cutting their exposure. The number of bullish hedge fund positions dropped by 18 in recent months. Knight-Swift Transportation Holdings Inc. (NYSE:KNX) was in 34 hedge funds’ portfolios at the end of December. The all time high for this statistic is 52. Our calculations also showed that KNX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Gavin Saitowitz of Prelude Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to take a glance at the new hedge fund action surrounding Knight-Swift Transportation Holdings Inc. (NYSE:KNX).

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

At the end of December, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -35% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards KNX over the last 22 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, D. E. Shaw’s D E Shaw has the largest position in Knight-Swift Transportation Holdings Inc. (NYSE:KNX), worth close to $117.8 million, amounting to 0.1% of its total 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $100.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions encompass Robert Bishop’s Impala Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Michael O’Keefe’s 12th Street Asset Management. In terms of the portfolio weights assigned to each position Impala Asset Management allocated the biggest weight to Knight-Swift Transportation Holdings Inc. (NYSE:KNX), around 4.34% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, earmarking 3.7 percent of its 13F equity portfolio to KNX.

Seeing as Knight-Swift Transportation Holdings Inc. (NYSE:KNX) has witnessed declining sentiment from the smart money, it’s easy to see that there were a few fund managers who were dropping their entire stakes in the fourth quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management dumped the biggest position of all the hedgies watched by Insider Monkey, worth close to $55.8 million in stock. Alexander Mitchell’s fund, Scopus Asset Management, also cut its stock, about $38 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 18 funds in the fourth quarter.

Let’s now review hedge fund activity in other stocks similar to Knight-Swift Transportation Holdings Inc. (NYSE:KNX). We will take a look at Novavax, Inc. (NASDAQ:NVAX), McAfee Corp. (NASDAQ:MCFE), Syneos Health, Inc. (NASDAQ:SYNH), First Horizon Corporation (NYSE:FHN), Donaldson Company, Inc. (NYSE:DCI), Redfin Corporation (NASDAQ:RDFN), and SiteOne Landscape Supply, Inc. (NYSE:SITE). All of these stocks’ market caps resemble KNX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $407 million. That figure was $429 million in KNX’s case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand SiteOne Landscape Supply, Inc. (NYSE:SITE) is the least popular one with only 17 bullish hedge fund positions. Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KNX is 49.1. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on KNX as the stock returned 16.8% since the end of Q4 (through 4/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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