Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the second quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) based on that data and determine whether they were really smart about the stock.
J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) investors should be aware of a decrease in hedge fund sentiment lately. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) was in 24 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 32. There were 25 hedge funds in our database with JBHT positions at the end of the first quarter. Our calculations also showed that JBHT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: 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' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Jeffrey Talpins of Element Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we're going to review the new hedge fund action surrounding J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT).
What does smart money think about J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)?
Heading into the third quarter of 2020, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in JBHT a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), which was worth $56.6 million at the end of the third quarter. On the second spot was Park Presidio Capital which amassed $54.2 million worth of shares. Point72 Asset Management, Schonfeld Strategic Advisors, and AQR 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 Park Presidio Capital allocated the biggest weight to J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), around 6.06% of its 13F portfolio. Running Oak Capital is also relatively very bullish on the stock, dishing out 1.95 percent of its 13F equity portfolio to JBHT.
Seeing as J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) has experienced falling interest from the entirety of the hedge funds we track, it's easy to see that there were a few money managers that decided to sell off their entire stakes heading into Q3. Intriguingly, Gregg Moskowitz's Interval Partners said goodbye to the biggest stake of the 750 funds tracked by Insider Monkey, totaling about $51.6 million in stock. Renaissance Technologies, also cut its stock, about $11.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q3.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) but similarly valued. We will take a look at Expeditors International of Washington, Inc. (NASDAQ:EXPD), Qorvo Inc (NASDAQ:QRVO), Etsy Inc (NASDAQ:ETSY), Genuine Parts Company (NYSE:GPC), Sarepta Therapeutics Inc (NASDAQ:SRPT), Hewlett Packard Enterprise Company (NYSE:HPE), and Grifols SA (NASDAQ:GRFS). This group of stocks' market valuations match JBHT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EXPD,33,443457,2 QRVO,51,1608774,12 ETSY,43,1727421,5 GPC,20,144284,-2 SRPT,39,1148135,6 HPE,31,693633,2 GRFS,21,583023,-2 Average,34,906961,3.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $907 million. That figure was $216 million in JBHT's case. Qorvo Inc (NASDAQ:QRVO) is the most popular stock in this table. On the other hand Genuine Parts Company (NYSE:GPC) is the least popular one with only 20 bullish hedge fund positions. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JBHT is 33. 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 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 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. A small number of hedge funds were also right about betting on JBHT, though not to the same extent, as the stock returned 7.7% so far during Q3 and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.