We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Landstar System, Inc. (NASDAQ:LSTR).
Landstar System, Inc. (NASDAQ:LSTR) was in 24 hedge funds' portfolios at the end of the fourth quarter of 2019. LSTR has seen an increase in hedge fund sentiment lately. There were 22 hedge funds in our database with LSTR holdings at the end of the previous quarter. Our calculations also showed that LSTR isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In today’s marketplace there are dozens of indicators stock market investors employ to grade stocks. A pair of the most under-the-radar indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can beat the broader indices by a superb margin (see the details here).
[caption id="attachment_193003" align="aligncenter" width="400"] Chuck Royce of Royce & Associates[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic's significance before most investors. Now let's review the new hedge fund action encompassing Landstar System, Inc. (NASDAQ:LSTR).
Hedge fund activity in Landstar System, Inc. (NASDAQ:LSTR)
At Q4's end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in LSTR 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.
Of the funds tracked by Insider Monkey, Chuck Royce's Royce & Associates has the number one position in Landstar System, Inc. (NASDAQ:LSTR), worth close to $64.6 million, comprising 0.6% of its total 13F portfolio. The second most bullish fund manager is Noam Gottesman of GLG Partners, with a $41.3 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism encompass Alexander Mitchell's Scopus Asset Management, Cliff Asness's AQR Capital Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Landstar System, Inc. (NASDAQ:LSTR), around 0.58% of its 13F portfolio. Scopus Asset Management is also relatively very bullish on the stock, designating 0.56 percent of its 13F equity portfolio to LSTR.
As one would reasonably expect, key money managers have jumped into Landstar System, Inc. (NASDAQ:LSTR) headfirst. Winton Capital Management, managed by David Harding, initiated the most valuable position in Landstar System, Inc. (NASDAQ:LSTR). Winton Capital Management had $7.1 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $6.5 million position during the quarter. The following funds were also among the new LSTR investors: Dmitry Balyasny's Balyasny Asset Management, Karim Abbadi and Edward McBride's Centiva Capital, and Ran Pang's Quantamental Technologies.
Let's now take a look at hedge fund activity in other stocks similar to Landstar System, Inc. (NASDAQ:LSTR). These stocks are Immunomedics, Inc. (NASDAQ:IMMU), NCR Corporation (NYSE:NCR), Cushman & Wakefield plc (NYSE:CWK), and China Biologic Products Inc (NASDAQ:CBPO). This group of stocks' market valuations resemble LSTR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IMMU,28,829753,6 NCR,32,289779,-2 CWK,18,216049,8 CBPO,19,562285,1 Average,24.25,474467,3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $474 million. That figure was $197 million in LSTR's case. NCR Corporation (NYSE:NCR) is the most popular stock in this table. On the other hand Cushman & Wakefield plc (NYSE:CWK) is the least popular one with only 18 bullish hedge fund positions. Landstar System, Inc. (NASDAQ:LSTR) is not the least popular stock in this group but hedge fund interest is still below average. 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 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on LSTR as the stock returned -14.7% during the same time period and outperformed the market by an even larger margin. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.