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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Ryder System, Inc. (NYSE:R).
Ryder System, Inc. (NYSE:R) investors should be aware of an increase in hedge fund interest of late. Ryder System, Inc. (NYSE:R) was in 20 hedge funds' portfolios at the end of March. The all time high for this statistic is 29. There were 17 hedge funds in our database with R positions at the end of the fourth quarter. Our calculations also showed that R isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 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.
Richard S. Pzena of Pzena Investment Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. With all of this in mind we're going to check out the new hedge fund action encompassing Ryder System, Inc. (NYSE:R).
Do Hedge Funds Think R Is A Good Stock To Buy Now?
At first quarter's end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in R over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Pzena Investment Management, managed by Richard S. Pzena, holds the most valuable position in Ryder System, Inc. (NYSE:R). Pzena Investment Management has a $205 million position in the stock, comprising 0.8% of its 13F portfolio. Sitting at the No. 2 spot is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $63.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Other peers that hold long positions consist of Cliff Asness's AQR Capital Management, Dmitry Balyasny's Balyasny Asset Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Pzena Investment Management allocated the biggest weight to Ryder System, Inc. (NYSE:R), around 0.83% of its 13F portfolio. Balyasny Asset Management is also relatively very bullish on the stock, earmarking 0.09 percent of its 13F equity portfolio to R.
With a general bullishness amongst the heavyweights, key money managers have jumped into Ryder System, Inc. (NYSE:R) headfirst. Bridgewater Associates, managed by Ray Dalio, established the biggest position in Ryder System, Inc. (NYSE:R). Bridgewater Associates had $3.8 million invested in the company at the end of the quarter. Donald Sussman's Paloma Partners also initiated a $1.5 million position during the quarter. The following funds were also among the new R investors: Jinghua Yan's TwinBeech Capital and Michael Gelband's ExodusPoint Capital.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Ryder System, Inc. (NYSE:R) but similarly valued. These stocks are F.N.B. Corp (NYSE:FNB), Balchem Corporation (NASDAQ:BCPC), Atlantica Sustainable Infrastructure plc (NASDAQ:AY), iRhythm Technologies, Inc. (NASDAQ:IRTC), Resideo Technologies, Inc. (NYSE:REZI), QTS Realty Trust Inc (NYSE:QTS), and Allegiant Travel Company (NASDAQ:ALGT). This group of stocks' market caps resemble R's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FNB,16,55214,-3 BCPC,14,43987,1 AY,13,42815,-1 IRTC,19,153258,0 REZI,27,666840,-4 QTS,22,451242,-1 ALGT,22,402206,3 Average,19,259366,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $259 million. That figure was $359 million in R's case. Resideo Technologies, Inc. (NYSE:REZI) is the most popular stock in this table. On the other hand Atlantica Sustainable Infrastructure plc (NASDAQ:AY) is the least popular one with only 13 bullish hedge fund positions. Ryder System, Inc. (NYSE:R) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for R is 53.7. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately R wasn't nearly as popular as these 5 stocks and hedge funds that were betting on R were disappointed as the stock returned -5.6% since the end of March (through 7/16) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.