The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards USA Truck, Inc. (NASDAQ:USAK).
Is USAK a good stock to buy now? USA Truck, Inc. (NASDAQ:USAK) investors should pay attention to an increase in activity from the world's largest hedge funds recently. USA Truck, Inc. (NASDAQ:USAK) was in 8 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. Our calculations also showed that USAK 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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 E. Shaw of D.E. Shaw
David E. Shaw of D.E. Shaw
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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. Keeping this in mind we're going to take a look at the fresh hedge fund action surrounding USA Truck, Inc. (NASDAQ:USAK).
How are hedge funds trading USA Truck, Inc. (NASDAQ:USAK)?
At third quarter's end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 167% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in USAK a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Is USAK A Good Stock To Buy?
Among these funds, Renaissance Technologies held the most valuable stake in USA Truck, Inc. (NASDAQ:USAK), which was worth $1 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $0.4 million worth of shares. D E Shaw, Arrowstreet Capital, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Engineers Gate Manager allocated the biggest weight to USA Truck, Inc. (NASDAQ:USAK), around 0.01% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.0048 percent of its 13F equity portfolio to USAK.
Consequently, specific money managers have jumped into USA Truck, Inc. (NASDAQ:USAK) headfirst. Renaissance Technologies, assembled the largest position in USA Truck, Inc. (NASDAQ:USAK). Renaissance Technologies had $1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also made a $0.2 million investment in the stock during the quarter. The other funds with brand new USAK positions are Israel Englander's Millennium Management, Greg Eisner's Engineers Gate Manager, and Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as USA Truck, Inc. (NASDAQ:USAK) but similarly valued. These stocks are Pixelworks, Inc. (NASDAQ:PXLW), Manitex International, Inc. (NASDAQ:MNTX), American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT), Mallinckrodt Public Limited Company (NYSE:MNK), First United Corp (NASDAQ:FUNC), Boxlight Corporation (NASDAQ:BOXL), and Ur-Energy Inc. (NYSE:URG). This group of stocks' market valuations are closest to USAK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PXLW,9,4915,0 MNTX,6,8481,0 AVCT,2,1071,0 MNK,12,3417,-2 FUNC,4,3568,0 BOXL,1,1285,0 URG,3,2681,1 Average,5.3,3631,-0.1 [/table]
As you can see these stocks had an average of 5.3 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $2 million in USAK's case. Mallinckrodt Public Limited Company (NYSE:MNK) is the most popular stock in this table. On the other hand Boxlight Corporation (NASDAQ:BOXL) is the least popular one with only 1 bullish hedge fund positions. USA Truck, Inc. (NASDAQ:USAK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for USAK is 57.8. 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 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 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately USAK wasn't nearly as popular as these 20 stocks and hedge funds that were betting on USAK were disappointed as the stock returned -2.5% since the end of September (through 12/2) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
