What Is Short Selling In Stock Market? 15 Stocks Hedge Funds are Shorting

3. Forward Air Corporation (NASDAQ:FWRD)

% of Institutional Ownership: 103.72% 

Float Shorted: 34.83%    

Forward Air Corporation, along with its subsidiaries, is an asset-light freight and logistics provider in the United States and Canada and ranks third on our list of stocks that hedge funds are shorting.

In its latest quarterly earnings report, experienced businessman Shawn Stewart has been named CEO of FWRD. Forward Air Corporation’s first quarter revenue for 2024 showed strong revenue growth, hitting $541.8 million, a 51.5% rise year over year, although falling short of the experts’ projection of $644 million. Despite this growth, the business declared a $88.8 million net loss, which it blamed on costs associated with incorporating Omni Logistics and operational challenges.

Despite generating $225 million in sales, the purchase of Omni Logistics led to a $5.9 million adjusted EBITDA loss. This demonstrates the difficulties with early integration and the negative effects of global market circumstances on Omni’s business operations. FWRD’s intermodal and truckload brokerage services were primarily hit by market challenges such as weak freight demand and extra capacity. In 2023, after the announcement of FWRD’s merger with Omni Logistics on July 28, 2023, the stocks surged, hitting a peak of $119.19 per share and falling more than 83% as of June 21, 2024. The stock price per share is $20.18 as of June 21.

Vulcan Value Partners made the following comment about Forward Air Corporation (NASDAQ:FWRD) in its Q3 2023 investor letter:

“During the quarter we sold Forward Air Corporation (NASDAQ:FWRD). The company announced its decision to acquire Omni Logistics for an enterprise value of $3.2 billion. The transaction will significantly increase leverage at the pro forma company and will materially dilute existing shareholders. We also think that the transaction has questionable strategic rationale and significant execution risk. In sum, the transaction not only reduced our estimate of intrinsic value per share, but made that estimate unstable, leading to our decision to exit the position.”

At the end of Q1 2024, 24 hedge funds tracked by Insider Monkey reported having stakes in Forward Air Corporation (NASDAQ:FWRD), down from 27 in the previous quarter.  Among these hedge funds, Israel Englander’s Millennium Management was the company’s leading stakeholder in Q1, owning 531,525 shares worth $16.54 million.