We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds' top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Wabash National Corporation (NYSE:WNC).
Wabash National Corporation (NYSE:WNC) was in 15 hedge funds' portfolios at the end of June. WNC shareholders have witnessed a decrease in hedge fund interest lately. There were 16 hedge funds in our database with WNC positions at the end of the previous quarter. Our calculations also showed that WNC isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are dozens of metrics market participants have at their disposal to size up their holdings. Some of the most innovative metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a healthy margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to review the key hedge fund action surrounding Wabash National Corporation (NYSE:WNC).
Hedge fund activity in Wabash National Corporation (NYSE:WNC)
Heading into the third quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WNC over the last 16 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the largest position in Wabash National Corporation (NYSE:WNC). Royce & Associates has a $28.3 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, with a $17.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions consist of Noam Gottesman's GLG Partners, D. E. Shaw's D E Shaw and John Overdeck and David Siegel's Two Sigma Advisors.
Judging by the fact that Wabash National Corporation (NYSE:WNC) has experienced bearish sentiment from the entirety of the hedge funds we track, it's safe to say that there lies a certain "tier" of hedge funds that decided to sell off their positions entirely heading into Q3. It's worth mentioning that Sara Nainzadeh's Centenus Global Management cut the biggest position of the 750 funds monitored by Insider Monkey, worth an estimated $1.5 million in stock, and Paul Tudor Jones's Tudor Investment Corp was right behind this move, as the fund dropped about $0.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q3.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Wabash National Corporation (NYSE:WNC) but similarly valued. These stocks are The Andersons, Inc. (NASDAQ:ANDE), TPI Composites, Inc. (NASDAQ:TPIC), Seacor Holdings, Inc. (NYSE:CKH), and Amerant Bancorp Inc. (NASDAQ:AMTB). All of these stocks' market caps are closest to WNC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ANDE,5,37702,-3 TPIC,16,169109,-3 CKH,14,138413,3 AMTB,1,7607,-4 Average,9,88208,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $64 million in WNC's case. TPI Composites, Inc. (NASDAQ:TPIC) is the most popular stock in this table. On the other hand Amerant Bancorp Inc. (NASDAQ:AMTB) is the least popular one with only 1 bullish hedge fund positions. Wabash National Corporation (NYSE:WNC) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately WNC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on WNC were disappointed as the stock returned -10.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.