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Is Rush Enterprises, Inc. (RUSHB) A Good Stock To Buy ?

Reymerlyn Martin

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 750 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2019. In this article we are going to take a look at smart money sentiment towards Rush Enterprises, Inc. (NASDAQ:RUSHB).

Rush Enterprises, Inc. (NASDAQ:RUSHB) investors should pay attention to an increase in hedge fund interest of late. RUSHB was in 3 hedge funds' portfolios at the end of September. There were 2 hedge funds in our database with RUSHB holdings at the end of the previous quarter. Our calculations also showed that RUSHB isn't among the 30 most popular stocks among hedge funds.

To the average investor there are a multitude of indicators stock market investors can use to evaluate their holdings. Two of the less utilized indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best fund managers can beat the S&P 500 by a solid margin (see the details here).

[caption id="attachment_375529" align="aligncenter" width="600"] Mario Gabelli of GAMCO Investors[/caption]

Mario Gabelli of GAMCO Investors

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's take a gander at the latest hedge fund action surrounding Rush Enterprises, Inc. (NASDAQ:RUSHB).

How have hedgies been trading Rush Enterprises, Inc. (NASDAQ:RUSHB)?

At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in RUSHB over the last 17 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

RUSHB_nov2019

More specifically, GAMCO Investors was the largest shareholder of Rush Enterprises, Inc. (NASDAQ:RUSHB), with a stake worth $24.5 million reported as of the end of September. Trailing GAMCO Investors was Renaissance Technologies, which amassed a stake valued at $11.3 million. Citadel Investment Group was 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 GAMCO Investors allocated the biggest weight to Rush Enterprises, Inc. (NASDAQ:RUSHB), around 0.2% of its portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to RUSHB.

As aggregate interest increased, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Rush Enterprises, Inc. (NASDAQ:RUSHB). Citadel Investment Group had $0.4 million invested in the company at the end of the quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Rush Enterprises, Inc. (NASDAQ:RUSHB) but similarly valued. We will take a look at trivago N.V. (NASDAQ:TRVG), Atrion Corporation (NASDAQ:ATRI), Masonite International Corp (NYSE:DOOR), and Tanger Factory Outlet Centers Inc. (NYSE:SKT). This group of stocks' market valuations are similar to RUSHB's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRVG,11,144580,2 ATRI,16,96778,5 DOOR,17,286300,-2 SKT,18,80072,4 Average,15.5,151933,2.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $36 million in RUSHB's case. Tanger Factory Outlet Centers Inc. (NYSE:SKT) is the most popular stock in this table. On the other hand trivago N.V. (NASDAQ:TRVG) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Rush Enterprises, Inc. (NASDAQ:RUSHB) is even less popular than TRVG. Hedge funds clearly dropped the ball on RUSHB as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. A small number of hedge funds were also right about betting on RUSHB as the stock returned 9.4% during the fourth quarter (through 11/22) and outperformed the market by an even larger margin.

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

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