Top Automotive Stocks That Hedge Funds Were Buying At The End Of Q2

by: Insider Monkey

Insider Monkey keeps its eyes on hedge fund managers as they’re the smartest investors around. They allocate portfolios with well-balanced risk and return. They evaluate the intrinsic value of stocks with well functional models and strategies. They utilize massive ways of research and data resources to follow and forecast the industrial trend.

Thus, we believe individuals are more likely to beat the market by imitating insiders and hedge funds than trading against them. Insider Monkey has compiled nearly 350 hedge funds with their holding information. We present a list of top 11 automaker stocks that hedge funds were buying in their portfolios at the end of Quarter 2 2011.



No. Hedge Funds

YTD return


General Motors Company




Ford Motor Credit Company




Navistar International Corporation




Wabco Holdings Inc.








Oshkosh Truck Corporation




Tesla Motors, Inc.




Tata Motors Ltd




Toyota Motor Corp Ltd Ord




Honda Motor Company, Ltd.




Federal Signal Corporation



Here is a brief summary of the top 8 stocks.

1. General Motors Company (NYSE:GM): As the most popular automaker loved by hedge funds, GM underperformed in 2011 and has lost 38% year to date. Jeffrey Tannenbaum’s Fir Tree had the most shares among seventy two hedge funds which owned GM in Q2. The firm increased its position by 52% to 7.7 million shares during that period.

2. Ford Motor Credit Company (NYSE:F): Owned by 48 hedge funds in the second quarter, F has declined 37% so far. Jonathon Jacobson’s Highfields Capital Management had more shares than the other hedge funds we track in Q2, with more than 29 million shares unchanged from the previous quarter.

3. Navistar International Corporation (NYSE:NAV): Thirty two hedge funds had NAV in their portfolio in Q2. The stock performed well in the first half of the year, but in June it reversed the uptrend. By now NAV had fallen by 32%. NAV’s biggest hedge fund shareholder was Alec Litowitz and Ross Laser’s Magnetar Capital with 25 million shares. The data was after the 9% decline in their position.

4. Wabco Holdings Inc. (NYSE:WBC): WBC has lost 21% year to date, but in Q2 it had a better performance. In total, twenty five hedge funds initiated their positions in WBC in the second quarter. Stephen Mandel’s Lone Pine Capital sharply increased its holding by 213% to 4 million shares, which was nearly 3 times more than the next guy, Q2 files show.

5. PACCAR Inc. (NASDAQ:PCAR): PCAR had struggled several times in the past quarters, but it had never generated enough strength to get back to its price level in 2010. The stock has declined by 35% year to date. Among twenty three hedge funds which had PCAR in their portfolios during Q2, several had changed their positions by large amounts. Ken Brodkowitz And Mike Vermut’s Newland Capital increased their holding by 66% to 783 thousand shares and became PCAR’s No.1 hedge fund shareholder.

6. Oshkosh Truck Corporation (NYSE:OSK): OSK is the biggest loser in this list, losing 46% so far this year. Twenty two hedge funds invested in OSK in Q2, with Alexander Roepers’s Atlantic Investment Management carrying the most. At the end of June the firm owned 4.2 million shares in its account, up by 83% from the previous quarter.

7. Tesla Motors, Inc. (NASDAQ:TSLA): With a choppy price pattern, TSLA fluctuated this year. It recognized a loss of 10% in 2011. The stock was in 12 hedge funds in Q2. Robert Pitts’s Steadfast Capital Management decreased its position by 10% last quarter, giving it a bit more than 1 million shares.

8. Tata Motors Ltd (NYSE:TTM): Poorly performing in 2011, TTM has declined by 41%. Eleven hedge funds owned the stock in Q2, and most of them cut their holdings. Ken Heebner’s Capital Growth Management applied a reduction of 84% to 1.5 million shares before the end of June.

As mentioned above, six stocks have fallen by more than 30%, and all 11 automakers have negative returns this year. The average loss is 33% as a group, which is much worse than the SPY loss of 3.45%. Automotive sector is a cyclical business and these are the first stocks fund managers sell when the economy is heading into a recession. It’s not a surprise that these stocks underperformed so far this year. However, if the economy isn’t as bad as currently expected, these stocks will outperform the market significantly That’s what these hedge funds are betting on.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.