Hedge Funds Are Crazy About TRC Companies, Inc. (TRR)

The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards TRC Companies, Inc. (NYSE:TRR).

Is TRC Companies, Inc. (NYSE:TRR) a good investment right now? Prominent investors are becoming more confident. The number of bullish hedge fund positions went up by 2 lately. At the end of this article, we will also compare TRC Companies, Inc. (NYSE:TRR) to other stocks, including MarineMax, Inc. (NYSE:HZO), Caretrust REIT Inc (NASDAQ:CTRE), and Renewable Energy Group Inc (NASDAQ:REGI) to get a better sense of its popularity.

In the financial world, there are numerous metrics stock market investors put to use to value publicly traded companies. Two of the less known metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best fund managers can trounce the broader indices by a solid margin (see the details here).

Keeping this in mind, we’re going to analyze the latest action encompassing TRC Companies, Inc. (NYSE:TRR).

How have hedgies been trading TRC Companies, Inc. (NYSE:TRR)?

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 22% from the second quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the largest position in TRC Companies, Inc. (NYSE:TRR), worth close to $27.3 million, amounting to 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Renaissance Technologies, with a $6.1 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Israel Englander’s Millennium Management, and Thomas E. Lynch’s Mill Road Capital Management.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Algert Coldiron Investors assembled the biggest position in TRC Companies, Inc. (NYSE:TRR). Algert Coldiron Investors had $2.1 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Mike Vranos’ Ellington, and Neil Chriss’ Hutchin Hill Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as TRC Companies, Inc. (NYSE:TRR) but similarly valued. These stocks are MarineMax, Inc. (NYSE:HZO), Caretrust REIT Inc (NASDAQ:CTRE), Renewable Energy Group Inc (NASDAQ:REGI), and Park Electrochemical Corp. (NYSE:PKE). This group of stocks’ market caps matches TRC Companies, Inc. (NYSE:TRR)’s market cap.

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 $50 million. That figure was $39 million in TRC Companies, Inc. (NYSE:TRR)’s case. MarineMax, Inc. (NYSE:HZO) is the most popular stock in this table. On the other hand, Park Electrochemical Corp. (NYSE:PKE) is the least popular one with only 7 bullish hedge fund positions. TRC Companies, Inc. (NYSE:TRR) 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, MarineMax, Inc. (NYSE:HZO) might be a better candidate to consider a long position.