We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Tutor Perini Corp (NYSE:TPC).
Is Tutor Perini Corp (NYSE:TPC) a buy right now? Prominent investors are betting on the stock. The number of long hedge fund bets improved by 3 recently. Our calculations also showed that TPC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). TPC was in 9 hedge funds’ portfolios at the end of September. There were 6 hedge funds in our database with TPC positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Arnaud Ajdler of Engine Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to review the latest hedge fund action regarding Tutor Perini Corp (NYSE:TPC).
What have hedge funds been doing with Tutor Perini Corp (NYSE:TPC)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in TPC 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.
Of the funds tracked by Insider Monkey, Engine Capital, managed by Arnaud Ajdler, holds the number one position in Tutor Perini Corp (NYSE:TPC). Engine Capital has a $3.2 million position in the stock, comprising 1.5% of its 13F portfolio. On Engine Capital’s heels is Manatuck Hill Partners, led by Mark Broach, holding a $1 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise David E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Bill Miller’s Miller Value Partners. In terms of the portfolio weights assigned to each position Engine Capital allocated the biggest weight to Tutor Perini Corp (NYSE:TPC), around 1.48% of its 13F portfolio. Manatuck Hill Partners is also relatively very bullish on the stock, designating 0.55 percent of its 13F equity portfolio to TPC.
Consequently, key money managers were breaking ground themselves. Engine Capital, managed by Arnaud Ajdler, initiated the most outsized position in Tutor Perini Corp (NYSE:TPC). Engine Capital had $3.2 million invested in the company at the end of the quarter. Mark Broach’s Manatuck Hill Partners also initiated a $1 million position during the quarter. The following funds were also among the new TPC investors: Bill Miller’s Miller Value Partners, Bruce Kovner’s Caxton Associates, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Tutor Perini Corp (NYSE:TPC). We will take a look at RadNet Inc. (NASDAQ:RDNT), Uxin Limited (NASDAQ:UXIN), Banc of California, Inc. (NYSE:BANC), and Conn’s, Inc. (NASDAQ:CONN). This group of stocks’ market values match TPC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RDNT | 14 | 72325 | 3 |
| UXIN | 4 | 23965 | 1 |
| BANC | 13 | 84719 | -1 |
| CONN | 16 | 133657 | -5 |
| Average | 11.75 | 78667 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $6 million in TPC’s case. Conn’s, Inc. (NASDAQ:CONN) is the most popular stock in this table. On the other hand Uxin Limited (NASDAQ:UXIN) is the least popular one with only 4 bullish hedge fund positions. Tutor Perini Corp (NYSE:TPC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on TPC as the stock returned 11.2% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
