Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of TrustCo Bank Corp NY (NASDAQ:TRST) based on that data and determine whether they were really smart about the stock.
TrustCo Bank Corp NY (NASDAQ:TRST) shareholders have witnessed a decrease in enthusiasm from smart money of late. TRST was in 11 hedge funds’ portfolios at the end of the first quarter of 2020. There were 14 hedge funds in our database with TRST holdings at the end of the previous quarter. Our calculations also showed that TRST isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to analyze the latest hedge fund action surrounding TrustCo Bank Corp NY (NASDAQ:TRST).
Hedge fund activity in TrustCo Bank Corp NY (NASDAQ:TRST)
Heading into the second quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -21% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in TRST 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.
Among these funds, Royce & Associates held the most valuable stake in TrustCo Bank Corp NY (NASDAQ:TRST), which was worth $12.3 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $8.5 million worth of shares. Millennium Management, Arrowstreet Capital, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to TrustCo Bank Corp NY (NASDAQ:TRST), around 0.17% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to TRST.
Because TrustCo Bank Corp NY (NASDAQ:TRST) has witnessed falling interest from the smart money, it’s safe to say that there exists a select few money managers who were dropping their entire stakes in the first quarter. It’s worth mentioning that Michael Gelband’s ExodusPoint Capital cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, valued at close to $0.6 million in stock. Noam Gottesman’s fund, GLG Partners, also sold off its stock, about $0.2 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 3 funds in the first quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as TrustCo Bank Corp NY (NASDAQ:TRST) but similarly valued. We will take a look at Relmada Therapeutics, Inc. (NASDAQ:RLMD), Tredegar Corporation (NYSE:TG), Westlake Chemical Partners LP (NYSE:WLKP), and SpartanNash Company (NASDAQ:SPTN). This group of stocks’ market valuations resemble TRST’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RLMD | 9 | 149193 | 1 |
| TG | 10 | 60803 | 1 |
| WLKP | 3 | 1095 | 1 |
| SPTN | 14 | 29101 | 0 |
| Average | 9 | 60048 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $30 million in TRST’s case. SpartanNash Company (NASDAQ:SPTN) is the most popular stock in this table. On the other hand Westlake Chemical Partners LP (NYSE:WLKP) is the least popular one with only 3 bullish hedge fund positions. TrustCo Bank Corp NY (NASDAQ:TRST) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. Unfortunately TRST wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on TRST were disappointed as the stock returned 18.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
