The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Tractor Supply Company (NASDAQ:TSCO) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Tractor Supply Company (NASDAQ:TSCO) the right pick for your portfolio? The best stock pickers were selling. The number of bullish hedge fund positions decreased by 5 in recent months. Tractor Supply Company (NASDAQ:TSCO) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 48. Our calculations also showed that TSCO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 38 hedge funds in our database with TSCO holdings at the end of June.
Richard Chilton of Chilton Investment Company
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a gander at the fresh hedge fund action encompassing Tractor Supply Company (NASDAQ:TSCO).
Do Hedge Funds Think TSCO Is A Good Stock To Buy Now?
At third quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. By comparison, 48 hedge funds held shares or bullish call options in TSCO a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the biggest position in Tractor Supply Company (NASDAQ:TSCO), worth close to $621.2 million, amounting to 2.1% of its total 13F portfolio. On Select Equity Group’s heels is Citadel Investment Group, led by Ken Griffin, holding a $118.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that are bullish contain Richard Chilton’s Chilton Investment Company, Brandon Haley’s Holocene Advisors and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Select Equity Group allocated the biggest weight to Tractor Supply Company (NASDAQ:TSCO), around 2.09% of its 13F portfolio. Chilton Investment Company is also relatively very bullish on the stock, earmarking 1.69 percent of its 13F equity portfolio to TSCO.
Since Tractor Supply Company (NASDAQ:TSCO) has witnessed a decline in interest from the smart money, it’s easy to see that there is a sect of fund managers that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the biggest stake of all the hedgies followed by Insider Monkey, totaling close to $25.2 million in stock, and Seth Cogswell’s Running Oak Capital was right behind this move, as the fund dumped about $6.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to Tractor Supply Company (NASDAQ:TSCO). These stocks are Fox Corporation (NASDAQ:FOXA), DISH Network Corp. (NASDAQ:DISH), Verisign, Inc. (NASDAQ:VRSN), Huntington Bancshares Incorporated (NASDAQ:HBAN), ORIX Corporation (NYSE:IX), Invitation Homes Inc. (NYSE:INVH), and Catalent Inc (NYSE:CTLT). This group of stocks’ market values match TSCO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FOXA | 32 | 616945 | -3 |
| DISH | 51 | 2439908 | 0 |
| VRSN | 40 | 5398949 | -1 |
| HBAN | 27 | 298895 | -6 |
| IX | 4 | 5007 | 0 |
| INVH | 36 | 824544 | 3 |
| CTLT | 38 | 1113573 | -2 |
| Average | 32.6 | 1528260 | -1.3 |
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As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $1528 million. That figure was $1219 million in TSCO’s case. DISH Network Corp. (NASDAQ:DISH) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 4 bullish hedge fund positions. Tractor Supply Company (NASDAQ:TSCO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TSCO is 51.5. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on TSCO as the stock returned 8% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
