The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Trade Desk Inc (NASDAQ:TTD) from the perspective of those successful funds.
Is Trade Desk Inc (NASDAQ:TTD) a bargain? The stock went public at the end of September and by the end of the month, nine funds from our database amassed long positions in the company. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Multi Packaging Solutions Intrntnl Ltd (NYSE:MPSX), CONMED Corporation (NASDAQ:CNMD), and Multi-Color Corporation (NASDAQ:LABL) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s take a look at the recent action regarding Trade Desk Inc (NASDAQ:TTD).
What does the smart money think about Trade Desk Inc (NASDAQ:TTD)?
As stated earlier, nine funds tracked by Insider Monkey held long positions in this stock at the end of September. Let’s take a closer look at some funds that ranked among the largest shareholders of the company.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Pine River Capital Management, led by Brian Taylor, holds the largest position in Trade Desk Inc (NASDAQ:TTD). Pine River Capital Management has a $2.2 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second most bullish fund manager is Millennium Management, one of the largest hedge funds in the world, holding a $1.8 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include Ken Griffin’s Citadel Investment Group, Rob Citrone’s Discovery Capital Management, and David Costen Haley’s HBK Investments. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
On the next page,we are going to see how the sentiment towards TTD compares with other stocks with similar market caps.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Trade Desk Inc (NASDAQ:TTD) but similarly valued. These stocks are Multi Packaging Solutions Intrntnl Ltd (NYSE:MPSX), CONMED Corporation (NASDAQ:CNMD), Multi-Color Corporation (NASDAQ:LABL), and Orion Engineered Carbons SA (NYSE:OEC). This group of stocks’ market values are closest to TTD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MPSX | 10 | 34161 | -7 |
| CNMD | 15 | 206084 | -1 |
| LABL | 7 | 45924 | 3 |
| OEC | 12 | 121102 | -1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was just $11 million in TTD’s case. CONMED Corporation (NASDAQ:CNMD) is the most popular stock in this table. On the other hand Multi-Color Corporation (NASDAQ:LABL) is the least popular one with only seven bullish hedge fund positions. Trade Desk Inc (NASDAQ:TTD) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CNMD might be a better candidate to consider taking a long position in.
Disclosure: none
