The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Tri Continental Corporation (NYSE:TY)?
Is Tri Continental Corporation (NYSE:TY) a buy, sell, or hold? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions inched up by 1 recently. Our calculations also showed that TY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). TY was in 3 hedge funds’ portfolios at the end of March. There were 2 hedge funds in our database with TY holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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. With all of this in mind let’s take a look at the fresh hedge fund action encompassing Tri Continental Corporation (NYSE:TY).
How have hedgies been trading Tri Continental Corporation (NYSE:TY)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TY over the last 18 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Among these funds, Ancora Advisors held the most valuable stake in Tri Continental Corporation (NYSE:TY), which was worth $0.8 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $0.8 million worth of shares. Ionic Capital Management was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ionic Capital Management allocated the biggest weight to Tri Continental Corporation (NYSE:TY), around 0.46% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, earmarking 0.04 percent of its 13F equity portfolio to TY.
As one would reasonably expect, key money managers have been driving this bullishness. Ionic Capital Management, managed by Bart Baum, initiated the most valuable position in Tri Continental Corporation (NYSE:TY). Ionic Capital Management had $0.6 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Tri Continental Corporation (NYSE:TY) but similarly valued. We will take a look at Victory Capital Holdings, Inc. (NASDAQ:VCTR), Marten Transport, Ltd (NASDAQ:MRTN), GreenTree Hospitality Group Ltd. (NYSE:GHG), and Weis Markets, Inc. (NYSE:WMK). This group of stocks’ market valuations resemble TY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VCTR | 8 | 64756 | 1 |
| MRTN | 16 | 46668 | -1 |
| GHG | 4 | 25903 | -4 |
| WMK | 12 | 30418 | 0 |
| Average | 10 | 41936 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $2 million in TY’s case. Marten Transport, Ltd (NASDAQ:MRTN) is the most popular stock in this table. On the other hand GreenTree Hospitality Group Ltd. (NYSE:GHG) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Tri Continental Corporation (NYSE:TY) is even less popular than GHG. Hedge funds dodged a bullet by taking a bearish stance towards TY. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately TY wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); TY investors were disappointed as the stock returned 13.8% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
