Hedge Funds Are Selling Teradata Corporation (TDC)

We, at Insider Monkey, have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those investors think of Teradata Corporation (NYSE:TDC).

Is Teradata Corporation (NYSE:TDC) an outstanding investment today? Money managers are becoming less hopeful. The number of bullish hedge fund bets retreated by an 8 in recent months. Teradata Corporation (NYSE:TDC) was in 22 hedge funds’ portfolios at the end of September. There were 30 hedge funds in our database with Teradata Corporation (NYSE:TDC) holdings at the end of the previous quarter. At the end of this article, we will also compare Teradata Corporation (NYSE:TDC) to other stocks, including Weingarten Realty Investors (NYSE:WRI), Visteon Corp (NYSE:VC), and Old Republic International Corporation (NYSE:ORI) to get a better sense of its popularity.

According to most shareholders, hedge funds are perceived as underperforming, old investment tools of the past. While there are more than an 8000 funds in operation at present, We choose to focus on the elite of this group, approximately 700 funds. These money managers handle the lion’s share of the smart money’s total capital, and by observing their highest performing stock picks, Insider Monkey has formulated many investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, we’re going to take a peek at the new action regarding Teradata Corporation (NYSE:TDC).

How have hedgies been trading Teradata Corporation (NYSE:TDC)?

At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 27% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Charles de Vaulx’s International Value Advisers has the most valuable position in Teradata Corporation (NYSE:TDC), worth close to $114 million, amounting to 3% of its total 13F portfolio. On International Value Advisers’ heels is Carlson Capital, led by Clint Carlson, holding a $89.2 million position; 1% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish encompass Ken Griffin’s Citadel Investment Group, David Harding’s Winton Capital Management, and Joel Greenblatt’s Gotham Asset Management.

Because Teradata Corporation (NYSE:TDC) has witnessed a bearish sentiment from the smart money, it’s safe to say that there was a specific group of funds that elected to cut their entire stakes by the end of the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the biggest position of the 700 funds followed by Insider Monkey, comprising an estimated $11.2 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dropped about $9.5 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest fell by 8 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Teradata Corporation (NYSE:TDC) but similarly valued. We will take a look at Weingarten Realty Investors (NYSE:WRI), Visteon Corp (NYSE:VC), Old Republic International Corporation (NYSE:ORI), and Juno Therapeutics Inc (NASDAQ:JUNO). This group of stocks’ market valuations is closest to Teradata Corporation (NYSE:TDC)’s market valuation.

As you can see, these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $454 million. That figure was $864 million in Teradata Corporation (NYSE:TDC)’s case. Visteon Corp (NYSE:VC) is the most popular stock in this table. On the other hand, Weingarten Realty Investors (NYSE:WRI) is the least popular one with only 13 bullish hedge fund positions. Teradata Corporation (NYSE:TDC) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Visteon Corp (NYSE:VC) might be a better candidate to consider a long position.