Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about AMERCO (NASDAQ:UHAL).
AMERCO (NASDAQ:UHAL) was in 10 hedge funds' portfolios at the end of the third quarter of 2019. UHAL has experienced a decrease in hedge fund interest recently. There were 15 hedge funds in our database with UHAL holdings at the end of the previous quarter. Our calculations also showed that UHAL isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are perceived as slow, old financial vehicles of the past. While there are over 8000 funds in operation at the moment, Our experts hone in on the aristocrats of this club, approximately 750 funds. These investment experts manage the lion's share of the hedge fund industry's total asset base, and by keeping track of their finest investments, Insider Monkey has revealed various investment strategies that have historically outpaced the market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_221324" align="aligncenter" width="450"] Donald Yacktman of Yacktman Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a glance at the new hedge fund action surrounding AMERCO (NASDAQ:UHAL).
How have hedgies been trading AMERCO (NASDAQ:UHAL)?
At Q3's end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in UHAL a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Abrams Capital Management was the largest shareholder of AMERCO (NASDAQ:UHAL), with a stake worth $218.9 million reported as of the end of September. Trailing Abrams Capital Management was Yacktman Asset Management, which amassed a stake valued at $69.5 million. AQR Capital Management, Third Avenue Management, and Indaba Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Abrams Capital Management allocated the biggest weight to AMERCO (NASDAQ:UHAL), around 6.13% of its 13F portfolio. Indaba Capital Management is also relatively very bullish on the stock, setting aside 5.68 percent of its 13F equity portfolio to UHAL.
Due to the fact that AMERCO (NASDAQ:UHAL) has faced declining sentiment from hedge fund managers, it's easy to see that there was a specific group of fund managers who sold off their entire stakes by the end of the third quarter. At the top of the heap, C. Jonathan Gattman's Cloverdale Capital Management dumped the biggest position of all the hedgies tracked by Insider Monkey, worth an estimated $10.8 million in stock. Peter Rathjens, Bruce Clarke and John Campbell's fund, Arrowstreet Capital, also dropped its stock, about $1 million worth. These moves are important to note, as total hedge fund interest was cut by 5 funds by the end of the third quarter.
Let's also examine hedge fund activity in other stocks similar to AMERCO (NASDAQ:UHAL). These stocks are Bausch Health Companies Inc. (NYSE:BHC), Voya Financial Inc (NYSE:VOYA), Liberty Property Trust (NYSE:LPT), and Perrigo Company plc (NYSE:PRGO). This group of stocks' market caps are closest to UHAL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BHC,32,1808152,1 VOYA,37,1076870,-6 LPT,29,576112,10 PRGO,15,453537,-6 Average,28.25,978668,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.25 hedge funds with bullish positions and the average amount invested in these stocks was $979 million. That figure was $401 million in UHAL's case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table. On the other hand Perrigo Company plc (NYSE:PRGO) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks AMERCO (NASDAQ:UHAL) is even less popular than PRGO. Hedge funds dodged a bullet by taking a bearish stance towards UHAL. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately UHAL wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); UHAL investors were disappointed as the stock returned -7.1% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.