A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Texas Pacific Land Trust (NYSE:TPL).
Texas Pacific Land Trust (NYSE:TPL) was in 21 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. TPL has seen an increase in enthusiasm from smart money lately. There were 17 hedge funds in our database with TPL positions at the end of the first quarter. Our calculations also showed that TPL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Tom Gayner of Markel Gayner Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a look at the fresh hedge fund action surrounding Texas Pacific Land Trust (NYSE:TPL).
Do Hedge Funds Think TPL Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 24% from the first quarter of 2020. On the other hand, there were a total of 14 hedge funds with a bullish position in TPL a year ago. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Horizon Asset Management, managed by Murray Stahl, holds the most valuable position in Texas Pacific Land Trust (NYSE:TPL). Horizon Asset Management has a $2.4753 billion position in the stock, comprising 50.4% of its 13F portfolio. Sitting at the No. 2 spot is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $42.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish encompass Ed Beddow and William Tichy’s Beddow Capital Management, Mitch Cantor’s Mountain Lake Investment Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Horizon Asset Management allocated the biggest weight to Texas Pacific Land Trust (NYSE:TPL), around 50.42% of its 13F portfolio. Beddow Capital Management is also relatively very bullish on the stock, earmarking 10.07 percent of its 13F equity portfolio to TPL.
As one would reasonably expect, some big names were leading the bulls’ herd. Markel Gayner Asset Management, managed by Tom Gayner, initiated the largest position in Texas Pacific Land Trust (NYSE:TPL). Markel Gayner Asset Management had $7.2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $2.6 million position during the quarter. The following funds were also among the new TPL investors: Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Michael Gelband’s ExodusPoint Capital, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Texas Pacific Land Trust (NYSE:TPL) but similarly valued. These stocks are Cemex SAB de CV (NYSE:CX), Cna Financial Corporation (NYSE:CNA), Sibanye Stillwater Limited (NYSE:SBSW), Invesco Ltd. (NYSE:IVZ), iQIYI, Inc. (NASDAQ:IQ), Five9 Inc (NASDAQ:FIVN), and CRISPR Therapeutics AG (NASDAQ:CRSP). All of these stocks’ market caps resemble TPL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CX | 23 | 601778 | -1 |
| CNA | 13 | 65189 | -6 |
| SBSW | 15 | 257887 | -1 |
| IVZ | 40 | 1343997 | 8 |
| IQ | 27 | 1096859 | -13 |
| FIVN | 45 | 2150801 | 0 |
| CRSP | 34 | 1761605 | 7 |
| Average | 28.1 | 1039731 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $1040 million. That figure was $2592 million in TPL’s case. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table. On the other hand Cna Financial Corporation (NYSE:CNA) is the least popular one with only 13 bullish hedge fund positions. Texas Pacific Land Trust (NYSE:TPL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TPL is 51.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately TPL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); TPL investors were disappointed as the stock returned -20.7% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Texas Pacific Land Trust (NYSE:TPL)
Follow Texas Pacific Land Trust (NYSE:TPL)
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Disclosure: None. This article was originally published at Insider Monkey.
