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During the first half of the fourth quarter the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by about 4 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor (i.e. only 298 S&P 500 constituents were among the 500 most popular stocks among hedge funds), and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Knight-Swift Transportation Holdings Inc. (NYSE:KNX) and see how the stock is affected by the recent hedge fund activity. Knight-Swift Transportation Holdings Inc. (NYSE:KNX) investors should pay attention to a decrease in support from the world's most elite money managers in recent months. KNX was in 31 hedge funds' portfolios at the end of the third quarter of 2018. There were 37 hedge funds in our database with KNX holdings at the end of the previous quarter, still not enough to be counted as among the 30 most popular stocks among hedge funds. In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 17.4% year to date and outperformed the market by more than 14 percentage points this year. This strategy also outperformed the market by 3 percentage points in the fourth quarter despite the market volatility (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Knight Transportation and fellow Swift Transportation merged in an all-stock deal that gives the combined company an enterprise value of $6 billion in 2017. The move was a blockbuster M&A deal in the trucking industry, creating the largest trucking company in the United States. Let's analyze the latest hedge fund action regarding Knight-Swift Transportation Holdings Inc. (NYSE:KNX).
How have hedgies been trading Knight-Swift Transportation Holdings Inc. (NYSE:KNX)?
At Q3's end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in KNX at the beginning of this year. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.