It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by doing a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30th, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions, and these get disproportionately publicized in the financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Transportadora de Gas del Sur SA (ADR) (NYSE:TGS).
Is Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) a buy right now? The best stock pickers are becoming more confident. The number of bullish hedge fund positions inched up by 3 lately. Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. There were 2 hedge funds in our database with Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) holdings at the end of the previous quarter. At the end of this article, we will also compare Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) to other stocks including Cellcom Israel Ltd. (NYSE:CEL), AtriCure Inc. (NASDAQ:ATRC), and Universal Health Realty Income Trust (NYSE:UHT) to get a better sense of its popularity.
Follow Transportadora De Gas Del Sur Sa (NYSE:TGS)
Follow Transportadora De Gas Del Sur Sa (NYSE:TGS)
If you’d ask most shareholders, hedge funds are seen as worthless, outdated investment tools of yesteryear. While there are greater than 8000 funds in operation today, we choose to focus on the upper echelon of this club, approximately 700 funds. Most estimates calculate that this group of people handles the lion’s share of all hedge funds’ total asset base, and by watching their best investments, Insider Monkey has brought to light a number of investment strategies that have historically exceeded Mr. Market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, we’re going to go over the recent action surrounding Transportadora de Gas del Sur SA (ADR) (NYSE:TGS).
How are hedge funds trading Transportadora de Gas del Sur SA (ADR) (NYSE:TGS)?
Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 150% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies holds the most valuable position in Transportadora de Gas del Sur SA (ADR) (NYSE:TGS).enaissance Technologies has a $4.4 million position in the stock, comprising less than 0.1% of its 13F portfolio. On Renaissance Technologies’ heels is Point State Capital, led by Zach Schreiber, holding a $4.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock.
With general bullishness amongst the heavyweights, specific money managers have jumped into Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) headfirst. Fortress Investment Group, managed by Michael Novogratz, established a position with $0.3 million invested in the company at the end of the quarter.Rima Senvest Management also initiated a $0.3 million position during the quarter.The only other fund with a new position in the stock is Bailard Inc.
Let’s now take a look at hedge fund activity in other stocks similar to Transportadora de Gas del Sur SA (ADR) (NYSE:TGS). These stocks are Cellcom Israel Ltd. (NYSE:CEL), AtriCure Inc. (NASDAQ:ATRC), Universal Health Realty Income Trust (NYSE:UHT), and Fox Factory Holding Corp (NASDAQ:FOXF). All of these stocks’ market caps match Transportadora de Gas del Sur SA (ADR) (NYSE:TGS)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CEL | 5 | 24699 | -2 |
| ATRC | 17 | 139454 | 3 |
| UHT | 6 | 10441 | 1 |
| FOXF | 7 | 11988 | -5 |
As you can see, these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $9 million in Transportadora de Gas del Sur SA (ADR) (NYSE:TGS)’s case. AtriCure Inc. (NASDAQ:ATRC) is the most popular stock in this table. On the other hand, Cellcom Israel Ltd. (NYSE:CEL) is the least popular one with only 5 bullish hedge fund positions. Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) has the same popularity like the Cellcom Israel Ltd. (NYSE:CEL), which means it has not attractted many investments. This doesn’t necessarily imply that it is not a good stock to buy, but it might only suggest that investors find it overvalued, because they are not considering bullish thesis. In either case, we think you should do further research before including it in your portfolio.