Hedge Funds Are Cashing Out Of The TJX Companies, Inc. (TJX)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards The TJX Companies, Inc. (NYSE:TJX).

Is The TJX Companies, Inc. (NYSE:TJX) a buy right now? Money managers were in a pessimistic mood. The number of long hedge fund positions dropped by 7 lately. The TJX Companies, Inc. (NYSE:TJX) was in 56 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 78. Our calculations also showed that TJX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 63 hedge funds in our database with TJX positions at the end of the first quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

John Overdeck of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s review the new hedge fund action surrounding The TJX Companies, Inc. (NYSE:TJX).

Do Hedge Funds Think TJX Is A Good Stock To Buy Now?

At the end of June, a total of 56 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the previous quarter. On the other hand, there were a total of 72 hedge funds with a bullish position in TJX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, D E Shaw was the largest shareholder of The TJX Companies, Inc. (NYSE:TJX), with a stake worth $448.3 million reported as of the end of June. Trailing D E Shaw was Alkeon Capital Management, which amassed a stake valued at $411.3 million. Holocene Advisors, GLG Partners, and Two Sigma Advisors were 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 Broad Bay Capital allocated the biggest weight to The TJX Companies, Inc. (NYSE:TJX), around 11.37% of its 13F portfolio. Masterton Capital Management is also relatively very bullish on the stock, designating 7.94 percent of its 13F equity portfolio to TJX.

Judging by the fact that The TJX Companies, Inc. (NYSE:TJX) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of funds who were dropping their entire stakes by the end of the second quarter. Interestingly, Gavin Baker’s Atreides Management sold off the largest position of all the hedgies tracked by Insider Monkey, valued at close to $97.8 million in stock, and Renaissance Technologies was right behind this move, as the fund sold off about $83.7 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 7 funds by the end of the second quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as The TJX Companies, Inc. (NYSE:TJX) but similarly valued. These stocks are Cigna Corporation (NYSE:CI), Enbridge Inc (NYSE:ENB), The PNC Financial Services Group, Inc. (NYSE:PNC), Brookfield Asset Management Inc. (NYSE:BAM), Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR), FedEx Corporation (NYSE:FDX), and The Bank of Nova Scotia (NYSE:BNS). This group of stocks’ market caps match TJX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.3 hedge funds with bullish positions and the average amount invested in these stocks was $1507 million. That figure was $2387 million in TJX’s case. Cigna Corporation (NYSE:CI) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 14 bullish hedge fund positions. The TJX Companies, Inc. (NYSE:TJX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TJX is 62.4. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on TJX as the stock returned 5.9% since the end of Q2 (through 9/27) 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.