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Rush Enterprises, Inc. (RUSHB): Hedge Funds Are Snapping Up

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With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Rush Enterprises, Inc. (NASDAQ:RUSHB).

Rush Enterprises, Inc. (NASDAQ:RUSHB) was in 4 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. RUSHB investors should be aware of an increase in hedge fund interest in recent months. There were 3 hedge funds in our database with RUSHB holdings at the end of December. Our calculations also showed that RUSHB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Mario Gabelli of GAMCO Investors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we're going to check out the recent hedge fund action regarding Rush Enterprises, Inc. (NASDAQ:RUSHB).

Do Hedge Funds Think RUSHB Is A Good Stock To Buy Now?

At first quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RUSHB over the last 23 quarters. With hedge funds' capital changing hands, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Mario Gabelli's GAMCO Investors has the number one position in Rush Enterprises, Inc. (NASDAQ:RUSHB), worth close to $34.9 million, amounting to 0.3% of its total 13F portfolio. On GAMCO Investors's heels is Renaissance Technologies, holding a $18.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Michael Gelband's ExodusPoint Capital and . In terms of the portfolio weights assigned to each position GAMCO Investors allocated the biggest weight to Rush Enterprises, Inc. (NASDAQ:RUSHB), around 0.31% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to RUSHB.

As aggregate interest increased, key money managers were leading the bulls' herd. ExodusPoint Capital, managed by Michael Gelband, established the biggest position in Rush Enterprises, Inc. (NASDAQ:RUSHB). ExodusPoint Capital had $0.1 million invested in the company at the end of the quarter.

Let's also examine 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 Telephone & Data Systems, Inc. (NYSE:TDS), First Bancorp (NYSE:FBP), Academy Sports and Outdoors, Inc. (NASDAQ:ASO), Telos Corporation (NASDAQ:TLS), Green Dot Corporation (NYSE:GDOT), Aeva Technologies, Inc. (NYSE:AEVA), and Trinseo S.A. (NYSE:TSE). All of these stocks' market caps match RUSHB's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TDS,20,253689,-4 FBP,25,294812,2 ASO,37,409605,11 TLS,15,151370,-13 GDOT,26,513759,-6 AEVA,16,378663,0 TSE,17,51427,1 Average,22.3,293332,-1.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $293 million. That figure was $55 million in RUSHB's case. Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is the most popular stock in this table. On the other hand Telos Corporation (NASDAQ:TLS) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Rush Enterprises, Inc. (NASDAQ:RUSHB) is even less popular than TLS. Our overall hedge fund sentiment score for RUSHB is 23.1. 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. Hedge funds dodged a bullet by taking a bearish stance towards RUSHB. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th but managed to beat the market again by 3.3 percentage points. Unfortunately RUSHB wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); RUSHB investors were disappointed as the stock returned -7.7% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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

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