Swift Transportation Co (SWFT): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

If you were to ask many of your peers, hedge funds are viewed as delayed, outdated financial vehicles of a period lost to current times. Although there are more than 8,000 hedge funds in operation in present day, this site focuses on the masters of this group, around 525 funds. It is widely held that this group has its hands on the lion’s share of the smart money’s total assets, and by paying attention to their highest performing investments, we’ve uncovered a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as useful, bullish insider trading sentiment is another way to look at the stock market universe. There are many incentives for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this method if piggybackers understand what to do (learn more here).

Keeping this in mind, we’re going to discuss the newest info about Swift Transportation Co (NYSE:SWFT).

What does the smart money think about Swift Transportation Co (NYSE:SWFT)?

Heading into Q3, a total of 26 of the hedge funds we track held long positions in this stock, a change of -13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.

Out of the hedge funds we follow, Odey Asset Management Group, managed by Crispin Odey, holds the largest position in Swift Transportation Co (NYSE:SWFT). Odey Asset Management Group has a $79 million position in the stock, comprising 3.1% of its 13F portfolio. Sitting at the No. 2 spot is Valinor Management LLC, managed by David Gallo, which held a $57.8 million position; 2.4% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Steven Cohen’s SAC Capital Advisors.

Due to the fact Swift Transportation Co (NYSE:SWFT) has faced a fall in interest from the smart money’s best and brightest, it’s easy to see that there is a sect of money managers who were dropping their entire stakes at the end of the second quarter. Interestingly, David Keidan’s Buckingham Capital Management dropped the biggest position of all the hedgies we key on, worth about $7.6 million in call options., and John Fichthorn of Dialectic Capital Management was right behind this move, as the fund cut about $2.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds at the end of the second quarter.

How have insiders been trading Swift Transportation Co (NYSE:SWFT)?

Insider buying made by high-level executives is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time period, Swift Transportation Co (NYSE:SWFT) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Swift Transportation Co (NYSE:SWFT). These stocks are Old Dominion Freight Line (NASDAQ:ODFL), Knight Transportation (NYSE:KNX), Landstar System, Inc. (NASDAQ:LSTR), Werner Enterprises, Inc. (NASDAQ:WERN), and Con-way Inc (NYSE:CNW). This group of stocks belong to the trucking industry and their market caps match SWFT’s market cap.

Using the results explained by our studies, average investors must always keep one eye on hedge fund and insider trading sentiment, and Swift Transportation Co (NYSE:SWFT) is no exception.

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