Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Total System Services, Inc. (NYSE:TSS) from the perspective of those elite funds.
Total System Services, Inc. (NYSE:TSS) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. TSS was in 35 hedge funds’ portfolios at the end of the third quarter of 2018. There were 29 hedge funds in our database with TSS positions at the end of the previous quarter. Our calculations also showed that tss isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? 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.
We’re going to check out the new hedge fund action surrounding Total System Services, Inc. (NYSE:TSS).
What have hedge funds been doing with Total System Services, Inc. (NYSE:TSS)?
At the end of the third quarter, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TSS over the last 13 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the most valuable position in Total System Services, Inc. (NYSE:TSS), worth close to $280.8 million, corresponding to 0.1% of its total 13F portfolio. The second most bullish fund manager is AQR Capital Management, managed by Cliff Asness, which holds a $245 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions contain Israel Englander’s Millennium Management, Dmitry Balyasny’s Balyasny Asset Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Now, key money managers have jumped into Total System Services, Inc. (NYSE:TSS) headfirst. Samlyn Capital, managed by Robert Pohly, created the largest position in Total System Services, Inc. (NYSE:TSS). Samlyn Capital had $35.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $19.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Leon Shaulov’s Maplelane Capital, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks similar to Total System Services, Inc. (NYSE:TSS). These stocks are The Hartford Financial Services Group, Inc. (NYSE:HIG), Cheniere Energy, Inc. (NYSEAMEX:LNG), Magna International Inc. (NYSE:MGA), and Credicorp Ltd. (NYSE:BAP). This group of stocks’ market caps are closest to TSS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HIG | 37 | 1508484 | 0 |
| LNG | 42 | 5973125 | 1 |
| MGA | 20 | 413773 | -4 |
| BAP | 15 | 824239 | 0 |
| Average | 28.5 | 2179905 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.5 hedge funds with bullish positions and the average amount invested in these stocks was $2.18 billion. That figure was $1.38 billion in TSS’s case. Cheniere Energy, Inc. (NYSEAMEX:LNG) is the most popular stock in this table. On the other hand Credicorp Ltd. (NYSE:BAP) is the least popular one with only 15 bullish hedge fund positions. Total System Services, Inc. (NYSE:TSS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LNG might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
