We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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. We at Insider Monkey have plowed through 835 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of Tetra Tech, Inc. (NASDAQ:TTEK).
Tetra Tech, Inc. (NASDAQ:TTEK) has experienced an increase in hedge fund interest recently. Our calculations also showed that TTEK isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In today’s marketplace there are tons of tools stock traders use to evaluate stocks. Some of the most innovative tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top investment managers can trounce their index-focused peers by a very impressive amount (see the details here).
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. 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. Keeping this in mind let’s analyze the latest hedge fund action surrounding Tetra Tech, Inc. (NASDAQ:TTEK).
What have hedge funds been doing with Tetra Tech, Inc. (NASDAQ:TTEK)?
At the end of the fourth quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. On the other hand, there were a total of 25 hedge funds with a bullish position in TTEK a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, AQR Capital Management, managed by Cliff Asness, holds the largest position in Tetra Tech, Inc. (NASDAQ:TTEK). AQR Capital Management has a $24 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Principal Global Investors of Columbus Circle Investors, with a $13.9 million position; 0.6% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism encompass Noam Gottesman’s GLG Partners, Andrew Sandler’s Sandler Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Sandler Capital Management allocated the biggest weight to Tetra Tech, Inc. (NASDAQ:TTEK), around 1.34% of its 13F portfolio. Columbus Circle Investors is also relatively very bullish on the stock, earmarking 0.6 percent of its 13F equity portfolio to TTEK.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Renaissance Technologies, founded by Jim Simons, established the biggest position in Tetra Tech, Inc. (NASDAQ:TTEK). Renaissance Technologies had $1.6 million invested in the company at the end of the quarter. Michael Kharitonov and Jon David McAuliffe’s Voleon Capital also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Mika Toikka’s AlphaCrest Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Minhua Zhang’s Weld Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tetra Tech, Inc. (NASDAQ:TTEK) but similarly valued. These stocks are Mattel, Inc. (NASDAQ:MAT), Wyndham Destinations, Inc. (NYSE:WYND), Micro Focus Intl PLC (NYSE:MFGP), and Assured Guaranty Ltd. (NYSE:AGO). This group of stocks’ market caps match TTEK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MAT | 19 | 738702 | -5 |
| WYND | 28 | 394113 | 5 |
| MFGP | 11 | 36197 | 3 |
| AGO | 33 | 586688 | -5 |
| Average | 22.75 | 438925 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.75 hedge funds with bullish positions and the average amount invested in these stocks was $439 million. That figure was $103 million in TTEK’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand Micro Focus Intl PLC (NYSE:MFGP) is the least popular one with only 11 bullish hedge fund positions. Tetra Tech, Inc. (NASDAQ:TTEK) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. Hedge funds were also right about betting on TTEK, though not to the same extent, as the stock returned -19% during the first two and a half months of 2020 (through March 25th) and outperformed the market as well.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
