The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity 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 March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Schneider National, Inc. (NYSE:SNDR) based on those filings.
Hedge fund interest in Schneider National, Inc. (NYSE:SNDR) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare SNDR to other stocks including Enstar Group Ltd. (NASDAQ:ESGR), Houlihan Lokey Inc (NYSE:HLI), and Choice Hotels International, Inc. (NYSE:CHH) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_745225" align="aligncenter" width="400"] Noam Gottesman of GLG Partners[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to check out the key hedge fund action surrounding Schneider National, Inc. (NYSE:SNDR).
Hedge fund activity in Schneider National, Inc. (NYSE:SNDR)
At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SNDR over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, AQR Capital Management, managed by Cliff Asness, holds the number one position in Schneider National, Inc. (NYSE:SNDR). AQR Capital Management has a $10.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by D E Shaw, led by D. E. Shaw, holding a $10.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism include John Overdeck and David Siegel's Two Sigma Advisors, Noam Gottesman's GLG Partners and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Centenus Global Management allocated the biggest weight to Schneider National, Inc. (NYSE:SNDR), around 1.27% of its 13F portfolio. ACK Asset Management is also relatively very bullish on the stock, dishing out 0.69 percent of its 13F equity portfolio to SNDR.
Since Schneider National, Inc. (NYSE:SNDR) has witnessed a decline in interest from hedge fund managers, it's easy to see that there is a sect of fund managers that decided to sell off their entire stakes by the end of the first quarter. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management dumped the largest stake of all the hedgies monitored by Insider Monkey, worth about $30.7 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund said goodbye to about $3.3 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Schneider National, Inc. (NYSE:SNDR). We will take a look at Enstar Group Ltd. (NASDAQ:ESGR), Houlihan Lokey Inc (NYSE:HLI), Choice Hotels International, Inc. (NYSE:CHH), and Tata Motors Limited (NYSE:TTM). This group of stocks' market valuations resemble SNDR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ESGR,11,339675,-2 HLI,15,133644,5 CHH,16,101950,0 TTM,10,60931,-1 Average,13,159050,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $67 million in SNDR's case. Choice Hotels International, Inc. (NYSE:CHH) is the most popular stock in this table. On the other hand Tata Motors Limited (NYSE:TTM) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Schneider National, Inc. (NYSE:SNDR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. Unfortunately SNDR wasn't nearly as popular as these 10 stocks and hedge funds that were betting on SNDR were disappointed as the stock returned 22.4% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.