World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
TELUS Corporation (NYSE:TU) has seen an increase in support from the world’s most elite money managers in recent months. TU was in 12 hedge funds’ portfolios at the end of the third quarter of 2018. There were 8 hedge funds in our database with TU holdings at the end of the previous quarter. Our calculations also showed that tu isn’t among the 30 most popular stocks among hedge funds.
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. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a gander at the key hedge fund action regarding TELUS Corporation (NYSE:TU).
How are hedge funds trading TELUS Corporation (NYSE:TU)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in TU at the beginning of this year. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in TELUS Corporation (NYSE:TU), which was worth $196.6 million at the end of the third quarter. On the second spot was GLG Partners which amassed $32.3 million worth of shares. Moreover, D E Shaw, Bridgewater Associates, and Citadel Investment Group were also bullish on TELUS Corporation (NYSE:TU), allocating a large percentage of their portfolios to this stock.
Now, specific money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most outsized position in TELUS Corporation (NYSE:TU). Arrowstreet Capital had $3.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.3 million position during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser’s Magnetar Capital, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Frederick DiSanto’s Ancora Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TELUS Corporation (NYSE:TU) but similarly valued. We will take a look at Teva Pharmaceutical Industries Limited (NYSE:TEVA), Ryanair Holdings plc (NASDAQ:RYAAY), Best Buy Co., Inc. (NYSE:BBY), and Tyson Foods, Inc. (NYSE:TSN). This group of stocks’ market values are closest to TU’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEVA | 36 | 2509183 | 6 |
| RYAAY | 13 | 318987 | 4 |
| BBY | 27 | 1563258 | -3 |
| TSN | 39 | 1590018 | 8 |
| Average | 28.75 | 1495362 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.50 billion. That figure was $296 million in TU’s case. Tyson Foods, Inc. (NYSE:TSN) is the most popular stock in this table. On the other hand Ryanair Holdings plc (NASDAQ:RYAAY) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks TELUS Corporation (NYSE:TU) is even less popular than RYAAY. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None. This article was originally published at Insider Monkey.
