Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can't match. So should one consider investing in Werner Enterprises, Inc. (NASDAQ:WERN)? The smart money sentiment can provide an answer to this question.
Is Werner Enterprises, Inc. (NASDAQ:WERN) a buy right now? The smart money is turning less bullish. The number of bullish hedge fund positions were trimmed by 3 recently. Our calculations also showed that WERN isn't among the 30 most popular stocks among hedge funds. WERN was in 17 hedge funds' portfolios at the end of the third quarter of 2018. There were 20 hedge funds in our database with WERN positions at the end of the previous quarter.
To the average investor there are a lot of formulas market participants use to assess publicly traded companies. A duo of the best formulas are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the top fund managers can outpace the broader indices by a solid amount (see the details here).
We're going to take a peek at the new hedge fund action encompassing Werner Enterprises, Inc. (NASDAQ:WERN).
What does the smart money think about Werner Enterprises, Inc. (NASDAQ:WERN)?
At Q3's end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in WERN over the last 13 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Werner Enterprises, Inc. (NASDAQ:WERN) was held by AQR Capital Management, which reported holding $37.6 million worth of stock at the end of September. It was followed by Millennium Management with a $25.3 million position. Other investors bullish on the company included Citadel Investment Group, D E Shaw, and Two Sigma Advisors.
Due to the fact that Werner Enterprises, Inc. (NASDAQ:WERN) has witnessed declining sentiment from the smart money, it's safe to say that there were a few funds who were dropping their positions entirely in the third quarter. Interestingly, Brian Gustavson and Andrew Haley's 1060 Capital Management sold off the largest investment of the "upper crust" of funds followed by Insider Monkey, valued at about $12.9 million in stock, and Gregg Moskowitz's Interval Partners was right behind this move, as the fund said goodbye to about $6.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds in the third quarter.
Let's check out hedge fund activity in other stocks similar to Werner Enterprises, Inc. (NASDAQ:WERN). We will take a look at Genomic Health, Inc. (NASDAQ:GHDX), Itron, Inc. (NASDAQ:ITRI), Moelis & Company (NYSE:MC), and ProAssurance Corporation (NYSE:PRA). This group of stocks' market caps resemble WERN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GHDX,18,1237191,2 ITRI,17,624732,4 MC,20,80299,7 PRA,13,211984,-1 Average,17,538552,3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $539 million. That figure was $132 million in WERN's case. Moelis & Company (NYSE:MC) is the most popular stock in this table. On the other hand ProAssurance Corporation (NYSE:PRA) is the least popular one with only 13 bullish hedge fund positions. Werner Enterprises, Inc. (NASDAQ:WERN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. In this regard MC might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.