World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Saia Inc (NASDAQ:SAIA) has experienced an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that saia isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s view the key hedge fund action encompassing Saia Inc (NASDAQ:SAIA).
How have hedgies been trading Saia Inc (NASDAQ:SAIA)?
Heading into the fourth quarter of 2018, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards SAIA over the last 13 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Millennium Management, managed by Israel Englander, holds the biggest position in Saia Inc (NASDAQ:SAIA). Millennium Management has a $15.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Royce & Associates, led by Chuck Royce, holding a $14.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that are bullish encompass Richard Driehaus’s Driehaus Capital, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the most valuable position in Saia Inc (NASDAQ:SAIA). Millennium Management had $15.2 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Paul Tudor Jones’s Tudor Investment Corp.
Let’s check out hedge fund activity in other stocks similar to Saia Inc (NASDAQ:SAIA). We will take a look at Select Income REIT (NASDAQ:SIR), Stepan Company (NYSE:SCL), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), and Ferro Corporation (NYSE:FOE). This group of stocks’ market valuations are closest to SAIA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SIR | 17 | 63631 | 5 |
| SCL | 10 | 48107 | 0 |
| AXL | 25 | 230897 | -2 |
| FOE | 18 | 291059 | 3 |
| Average | 17.5 | 158424 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $158 million. That figure was $72 million in SAIA’s case. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Stepan Company (NYSE:SCL) is the least popular one with only 10 bullish hedge fund positions. Saia Inc (NASDAQ:SAIA) 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. In this regard AXL might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
