Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by 4 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Radiant Logistics, Inc. (NYSE:RLGT).
Radiant Logistics, Inc. (NYSE:RLGT) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds' portfolios at the end of June. 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 Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Source Capital, Inc. (NYSE:SOR), and Cumulus Media Inc (NASDAQ:CMLS) to gather more data points. Our calculations also showed that RLGT isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. We're going to review the fresh hedge fund action regarding Radiant Logistics, Inc. (NYSE:RLGT).
Hedge fund activity in Radiant Logistics, Inc. (NYSE:RLGT)
At the end of the second quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RLGT over the last 16 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Frederick DiSanto's Ancora Advisors has the most valuable position in Radiant Logistics, Inc. (NYSE:RLGT), worth close to $3.8 million, amounting to 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions include Renaissance Technologies, John Overdeck and David Siegel's Two Sigma Advisors and Ken Griffin's Citadel Investment Group.
Since Radiant Logistics, Inc. (NYSE:RLGT) has witnessed declining sentiment from the aggregate hedge fund industry, it's easy to see that there is a sect of fund managers that slashed their positions entirely by the end of the second quarter. It's worth mentioning that Thomas Bailard's Bailard Inc cut the largest position of the 750 funds followed by Insider Monkey, valued at an estimated $0.2 million in stock, and Mike Vranos's Ellington was right behind this move, as the fund cut about $0.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to Radiant Logistics, Inc. (NYSE:RLGT). These stocks are Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Source Capital, Inc. (NYSE:SOR), Cumulus Media Inc (NASDAQ:CMLS), and Legacy Housing Corporation (NASDAQ:LEGH). This group of stocks' market caps match RLGT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLRE,8,3855,5 SOR,2,7237,0 CMLS,9,117968,-4 LEGH,3,675,-4 Average,5.5,32434,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $12 million in RLGT's case. Cumulus Media Inc (NASDAQ:CMLS) is the most popular stock in this table. On the other hand Source Capital, Inc. (NYSE:SOR) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Radiant Logistics, Inc. (NYSE:RLGT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately RLGT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on RLGT were disappointed as the stock returned -15.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.