Should You Buy Hub Group Inc (HUBG)?

Is it smart to be bullish on Hub Group Inc (NASDAQ:HUBG)?

Now, according to many investors, hedge funds are perceived as overrated, old investment tools of an era lost to time. Although there are more than 8,000 hedge funds in operation today, Insider Monkey aim at the leaders of this group, around 525 funds. It is widely held that this group has its hands on most of the smart money’s total assets, and by watching their best picks, we’ve come up with a number of investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as necessary, bullish insider trading activity is another way to analyze the financial markets. There are lots of reasons for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

Now that that’s out of the way, let’s study the recent info surrounding Hub Group Inc (NASDAQ:HUBG).

How have hedgies been trading Hub Group Inc (NASDAQ:HUBG)?

At the end of the second quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 25% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably.

According to our 13F database, Diamond Hill Capital, managed by Ric Dillon, holds the most valuable position in Hub Group Inc (NASDAQ:HUBG). Diamond Hill Capital has a $32.1 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $14.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Jim Simons’s Renaissance Technologies, Joel Greenblatt’s Gotham Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Consequently, specific money managers were breaking ground themselves. Diamond Hill Capital, managed by Ric Dillon, created the most outsized position in Hub Group Inc (NASDAQ:HUBG). Diamond Hill Capital had 32.1 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also made a $14.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies, Joel Greenblatt’s Gotham Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors.

Insider trading activity in Hub Group Inc (NASDAQ:HUBG)

Insider buying is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last six-month time period, Hub Group Inc (NASDAQ:HUBG) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Hub Group Inc (NASDAQ:HUBG). These stocks are XPO Logistics Inc (NYSE:XPO), Air Transport Services Group Inc. (NASDAQ:ATSG), Roadrunner Transportation Systems Inc (NYSE:RRTS), Forward Air Corporation (NASDAQ:FWRD), and UTi Worldwide Inc. (NASDAQ:UTIW). This group of stocks are in the air delivery & freight services industry and their market caps are closest to HUBG’s market cap.

Using the returns demonstrated by our analyses, average investors must always track hedge fund and insider trading activity, and Hub Group Inc (NASDAQ:HUBG) applies perfectly to this mantra.

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