Radiant Logistics, Inc. (RLGT): Are Hedge Funds Right About This Stock?

Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. Between November 1, 2014 and October 30 of this year, less than 49% of the stocks in the S&P 500 beat the market. However, hedge funds’ top 30 stock picks from the index had a much higher success rate than this, at 63%. The returns from these 30 stocks also easily bested the broader market, at 9.5% compared to 5.2%, despite there being a few duds in there like Micron and Anadarko (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.

Is Radiant Logistics, Inc. (NYSEMKT:RLGT) going to take off soon? The stock is down by 17% since the beginning of the year, but the best stock pickers are taking a bullish view. The number of long hedge fund positions inched up by 3 in recent months. RLGT was in 12 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with RLGT positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as GP Investments Acquisition Corp (NASDAQ:GPIA), INVUITY INC COM USD0.001 (NASDAQ:IVTY), and StealthGas Inc. (NASDAQ:GASS) to gather more data points.

In the financial world there are tons of gauges market participants put to use to grade publicly traded companies. A duo of the most under-the-radar gauges are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best money managers can outperform the S&P 500 by a significant margin (see the details here).

Keeping this in mind, we’re going to go over the new action encompassing Radiant Logistics, Inc. (NYSEMKT:RLGT).

How are hedge funds trading Radiant Logistics, Inc. (NYSEMKT:RLGT)?

Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the previous quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, holds the biggest position in Radiant Logistics, Inc. (NYSEMKT:RLGT). Nantahala Capital Management has a $6.3 million position in the stock, comprising 0.9% of its 13F portfolio. The second most bullish fund manager is Alyeska Investment Group, managed by Anand Parekh, which holds a $4.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism encompass Jim Simons’ Renaissance Technologies, Richard Driehaus’s Driehaus Capital, and Craig A. Drill’s Craig Drill Capital.

Now, some big names have been driving this bullishness. Alyeska Investment Group created the largest position in Radiant Logistics, Inc. (NYSEMKT:RLGT). David Costen Haley’s HBK Investments also made a $0.2 million investment in the stock during the quarter. The other funds with brand new RLGT positions are Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and Chuck Royce’s Royce & Associates.

Let’s now review hedge fund activity in other stocks similar to Radiant Logistics, Inc. (NYSEMKT:RLGT). These stocks are GP Investments Acquisition Corp (NASDAQ:GPIA), INVUITY INC COM USD0.001 (NASDAQ:IVTY), StealthGas Inc. (NASDAQ:GASS), and VirnetX Holding Corporation (NYSEMKT:VHC). This group of stocks’ market valuations are similar to RLGT’s market valuation.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $19 million in RLGT’s case. StealthGas Inc. (NASDAQ:GASS) is the most popular stock in this table. On the other hand VirnetX Holding Corporation (NYSEMKT:VHC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Radiant Logistics, Inc. (NYSEMKT:RLGT) 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.