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Is ArcBest Corp (ARCB) A Good Stock To Buy?

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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded ArcBest Corp (NASDAQ:ARCB) based on those filings.

Is ARCB a good stock to buy now? ArcBest Corp (NASDAQ:ARCB) investors should be aware of a decrease in hedge fund sentiment lately. ArcBest Corp (NASDAQ:ARCB) was in 22 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that ARCB isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind we're going to review the recent hedge fund action surrounding ArcBest Corp (NASDAQ:ARCB).


Louis Bacon Moore of Moore Capital

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

At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards ARCB over the last 25 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Alexander Mitchell's Scopus Asset Management has the number one position in ArcBest Corp (NASDAQ:ARCB), worth close to $38.8 million, accounting for 0.7% of its total 13F portfolio. On Scopus Asset Management's heels is Chuck Royce of Royce & Associates, with a $21.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish contain Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and George McCabe's Portolan Capital Management. In terms of the portfolio weights assigned to each position Elm Ridge Capital allocated the biggest weight to ArcBest Corp (NASDAQ:ARCB), around 1.53% of its 13F portfolio. Brant Point Investment Management is also relatively very bullish on the stock, designating 0.82 percent of its 13F equity portfolio to ARCB.

Since ArcBest Corp (NASDAQ:ARCB) has witnessed declining sentiment from hedge fund managers, logic holds that there is a sect of funds that elected to cut their full holdings in the third quarter. Interestingly, Alexander Mitchell's Scopus Asset Management cut the largest stake of all the hedgies watched by Insider Monkey, worth close to $14.5 million in stock, and Brandon Osten's Venator Capital Management was right behind this move, as the fund dumped about $2.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the third quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as ArcBest Corp (NASDAQ:ARCB) but similarly valued. We will take a look at LumiraDx Limited (NASDAQ:LMDX), Repay Holdings Corporation (NASDAQ:RPAY), InterDigital, Inc. (NASDAQ:IDCC), Offerpad Solutions Inc. (NYSE:OPAD), Canadian Solar Inc. (NASDAQ:CSIQ), Innospec Inc. (NASDAQ:IOSP), and Century Communities, Inc (NYSE:CCS). This group of stocks' market values are closest to ARCB's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LMDX,15,17357,15 RPAY,14,124761,-3 IDCC,14,170040,-5 OPAD,22,106606,22 CSIQ,12,35733,-1 IOSP,18,151317,4 CCS,21,120793,-4 Average,16.6,103801,4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $155 million in ARCB's case. Offerpad Solutions Inc. (NYSE:OPAD) is the most popular stock in this table. On the other hand Canadian Solar Inc. (NASDAQ:CSIQ) is the least popular one with only 12 bullish hedge fund positions. ArcBest Corp (NASDAQ:ARCB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ARCB is 82.7. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on ARCB as the stock returned 46.7% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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