Is Thermon Group Holdings, Inc. (NYSE:THR) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Thermon Group Holdings, Inc. (NYSE:THR) investors should be aware of an increase in enthusiasm from smart money recently. THR was in 10 hedge funds’ portfolios at the end of June. There were 8 hedge funds in our database with THR positions at the end of the previous quarter. Our calculations also showed that THR isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are numerous methods investors have at their disposal to value publicly traded companies. A duo of the most innovative methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the S&P 500 by a solid margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s review the recent hedge fund action surrounding Thermon Group Holdings, Inc. (NYSE:THR).
Hedge fund activity in Thermon Group Holdings, Inc. (NYSE:THR)
At Q2’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in THR a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
The largest stake in Thermon Group Holdings, Inc. (NYSE:THR) was held by Renaissance Technologies, which reported holding $12.8 million worth of stock at the end of March. It was followed by Rutabaga Capital Management with a $11.2 million position. Other investors bullish on the company included Impax Asset Management, Millennium Management, and Arrowstreet Capital.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Weld Capital Management, managed by Minhua Zhang, established the largest position in Thermon Group Holdings, Inc. (NYSE:THR). Weld Capital Management had $0.4 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.2 million investment in the stock during the quarter.
Let’s now review hedge fund activity in other stocks similar to Thermon Group Holdings, Inc. (NYSE:THR). We will take a look at Benefitfocus Inc (NASDAQ:BNFT), Homology Medicines, Inc. (NASDAQ:FIXX), ScanSource, Inc. (NASDAQ:SCSC), and GoPro Inc (NASDAQ:GPRO). All of these stocks’ market caps match THR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BNFT | 15 | 56723 | -7 |
| FIXX | 18 | 184706 | 11 |
| SCSC | 8 | 51782 | -2 |
| GPRO | 19 | 190326 | -4 |
| Average | 15 | 120884 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $121 million. That figure was $46 million in THR’s case. GoPro Inc (NASDAQ:GPRO) is the most popular stock in this table. On the other hand ScanSource, Inc. (NASDAQ:SCSC) is the least popular one with only 8 bullish hedge fund positions. Thermon Group Holdings, Inc. (NYSE:THR) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately THR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); THR investors were disappointed as the stock returned -10.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
