The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded AMERCO (NASDAQ:UHAL) based on those filings.
Is UHAL a good stock to buy now? AMERCO (NASDAQ:UHAL) shareholders have witnessed a decrease in enthusiasm from smart money lately. AMERCO (NASDAQ:UHAL) was in 19 hedge funds' portfolios at the end of September. The all time high for this statistic is 28. Our calculations also showed that UHAL isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 66 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Einhorn of Greenlight Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let's go over the fresh hedge fund action surrounding AMERCO (NASDAQ:UHAL).
Do Hedge Funds Think UHAL Is A Good Stock To Buy Now?
At the end of September, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from one quarter earlier. On the other hand, there were a total of 10 hedge funds with a bullish position in UHAL a year ago. So, let's examine 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, David Abrams's Abrams Capital Management has the most valuable position in AMERCO (NASDAQ:UHAL), worth close to $199.8 million, comprising 6.3% of its total 13F portfolio. Sitting at the No. 2 spot is Yacktman Asset Management, managed by Donald Yacktman, which holds a $90.8 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism comprise Richard Mashaal's Rima Senvest Management, Jonathan Esfandi's JNE Partners and Cliff Asness's AQR Capital Management. In terms of the portfolio weights assigned to each position JNE Partners allocated the biggest weight to AMERCO (NASDAQ:UHAL), around 22.32% of its 13F portfolio. Abrams Capital Management is also relatively very bullish on the stock, setting aside 6.32 percent of its 13F equity portfolio to UHAL.
Since AMERCO (NASDAQ:UHAL) has faced falling interest from the entirety of the hedge funds we track, it's easy to see that there is a sect of hedgies that elected to cut their entire stakes heading into Q4. At the top of the heap, Richard Chilton's Chilton Investment Company cut the largest investment of the "upper crust" of funds monitored by Insider Monkey, valued at an estimated $2.8 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund cut about $1.1 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks similar to AMERCO (NASDAQ:UHAL). We will take a look at IAA, Inc. (NYSE:IAA), Store Capital Corporation (NYSE:STOR), Mohawk Industries, Inc. (NYSE:MHK), GFL Environmental Inc. (NYSE:GFL), argenx SE (NASDAQ:ARGX), Knight-Swift Transportation Holdings Inc. (NYSE:KNX), and The Mosaic Company (NYSE:MOS). This group of stocks' market caps resemble UHAL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IAA,36,1299677,-7 STOR,20,763350,4 MHK,41,701743,9 GFL,20,361757,4 ARGX,22,1144400,-7 KNX,52,618019,13 MOS,31,714302,-1 Average,31.7,800464,2.1 [/table]
As you can see these stocks had an average of 31.7 hedge funds with bullish positions and the average amount invested in these stocks was $800 million. That figure was $437 million in UHAL's case. Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is the most popular stock in this table. On the other hand Store Capital Corporation (NYSE:STOR) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks AMERCO (NASDAQ:UHAL) is even less popular than STOR. Our overall hedge fund sentiment score for UHAL is 24.4. 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 clearly dropped the ball on UHAL as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on UHAL as the stock returned 20.5% since Q3 (through December 14th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
