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Is AMERCO (UHAL) Going to Burn These Hedge Funds?

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·6 min read
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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on AMERCO (NASDAQ:UHAL).

Is AMERCO (NASDAQ:UHAL) a splendid investment right now? The best stock pickers were taking a pessimistic view. The number of long hedge fund positions decreased by 2 in recent months. AMERCO (NASDAQ:UHAL) was in 21 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that UHAL isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 23 hedge funds in our database with UHAL positions at the end of the first quarter.

To most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of yesteryear. While there are over 8000 funds with their doors open today, We look at the crème de la crème of this club, around 850 funds. These money managers preside over bulk of all hedge funds' total asset base, and by tailing their top picks, Insider Monkey has revealed many investment strategies that have historically beaten the S&P 500 index. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Donald Yacktman of Yacktman Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let's take a look at the fresh hedge fund action regarding AMERCO (NASDAQ:UHAL).

Do Hedge Funds Think UHAL Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the first quarter of 2020. On the other hand, there were a total of 20 hedge funds with a bullish position in UHAL a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

Is UHAL A Good Stock To Buy?
Is UHAL A Good Stock To Buy?

The largest stake in AMERCO (NASDAQ:UHAL) was held by Abrams Capital Management, which reported holding $330.8 million worth of stock at the end of June. It was followed by Yacktman Asset Management with a $263.9 million position. Other investors bullish on the company included AQR Capital Management, JNE Partners, and Third Avenue Management. In terms of the portfolio weights assigned to each position JNE Partners allocated the biggest weight to AMERCO (NASDAQ:UHAL), around 21.99% of its 13F portfolio. Abrams Capital Management is also relatively very bullish on the stock, dishing out 7.35 percent of its 13F equity portfolio to UHAL.

Since AMERCO (NASDAQ:UHAL) has experienced bearish sentiment from the smart money, logic holds that there were a few hedge funds who sold off their positions entirely by the end of the second quarter. It's worth mentioning that Matt Sirovich and Jeremy Mindich's Scopia Capital said goodbye to the largest investment of the 750 funds monitored by Insider Monkey, totaling about $16.5 million in stock. Gavin Saitowitz and Cisco J. del Valle's fund, Prelude Capital (previously Springbok Capital), also sold off its stock, about $1.8 million worth. These moves are interesting, as total hedge fund interest fell by 2 funds by the end of the second quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as AMERCO (NASDAQ:UHAL) but similarly valued. These stocks are Cable One Inc (NYSE:CABO), Westlake Chemical Corporation (NYSE:WLK), Booz Allen Hamilton Holding Corporation (NYSE:BAH), Bruker Corporation (NASDAQ:BRKR), RPM International Inc. (NYSE:RPM), Axovant Sciences Ltd (NYSE:AXON), and Sunrun Inc (NASDAQ:RUN). This group of stocks' market valuations are closest to UHAL's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CABO,20,703195,-3 WLK,35,269784,9 BAH,29,214976,0 BRKR,31,459507,9 RPM,22,91588,2 AXON,24,513588,-7 RUN,45,2517525,4 Average,29.4,681452,2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.4 hedge funds with bullish positions and the average amount invested in these stocks was $681 million. That figure was $817 million in UHAL's case. Sunrun Inc (NASDAQ:RUN) is the most popular stock in this table. On the other hand Cable One Inc (NYSE:CABO) is the least popular one with only 20 bullish hedge fund positions. AMERCO (NASDAQ:UHAL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for UHAL is 27.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on UHAL as the stock returned 22.9% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.