Should You Buy Wabash National Corporation (WNC)?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Wabash National Corporation (NYSE:WNC).

Is Wabash National Corporation (NYSE:WNC) a worthy investment right now? The smart money is betting on the stock. The number of bullish hedge fund positions went up by 4 in recent months. 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 Roadrunner Transportation Systems Inc (NYSE:RRTS), Merge Healthcare Inc. (NASDAQ:MRGE), and The Providence Service Corporation (NASDAQ:PRSC) to gather more data points.

According to most traders, hedge funds are seen as unimportant, outdated investment vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, We choose to focus on the aristocrats of this club, approximately 700 funds. It is estimated that this group of investors command the lion’s share of all hedge funds’ total asset base, and by following their inimitable picks, Insider Monkey has revealed a number of investment strategies that have historically outpaced the broader indices. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, we’re going to take a look at the fresh action encompassing Wabash National Corporation (NYSE:WNC).

What does the smart money think about Wabash National Corporation (NYSE:WNC)?

Heading into Q4, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 20% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Joel Greenblatt’s Gotham Asset Management has the largest position in Wabash National Corporation (NYSE:WNC), worth close to $24.3 million, comprising 0.2% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, managed by Israel Englander, which holds an $13.3 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Mike Masters’s Masters Capital Management, Chuck Royce’s Royce & Associates and Ken Griffin’s Citadel Investment Group.

Consequently, key hedge funds have been driving this bullishness. Masters Capital Management, managed by Mike Masters, initiated the largest call position in Wabash National Corporation (NYSE:WNC). The fund had $1.6 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also made an $0.9 million investment in the stock during the quarter. The other funds with brand new WNC positions are Mike Vranos’s Ellington, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Cliff Asness’s AQR Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Wabash National Corporation (NYSE:WNC) but similarly valued. These stocks are Roadrunner Transportation Systems Inc (NYSE:RRTS), Merge Healthcare Inc. (NASDAQ:MRGE), The Providence Service Corporation (NASDAQ:PRSC), and Southside Bancshares, Inc. (NASDAQ:SBSI). This group of stocks’ market valuations resemble WNC’s market valuation.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. That figure was $66 million in WNC’s case, which is not very encouraging. The Providence Service Corporation (NASDAQ:PRSC) is the most popular stock in this table, while Southside Bancshares, Inc. (NASDAQ:SBSI) is the laggard with only 8 bullish hedge fund positions. Compared to these stocks Wabash National Corporation (NYSE:WNC) is clearly 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.