Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Tredegar Corporation (NYSE:TG).
Tredegar Corporation (NYSE:TG) was in 12 hedge funds’ portfolios at the end of March. TG has seen an increase in support from the world’s most elite money managers in recent months. There were 11 hedge funds in our database with TG holdings at the end of the previous quarter. Our calculations also showed that tg isn’t among the 30 most popular stocks among hedge funds.
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. 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 market by 40 percentage points since May 2014 through May 30, 2019 (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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Matthew Hulsizer of PEAK6 Capital
Let’s take a look at the fresh hedge fund action surrounding Tredegar Corporation (NYSE:TG).
Hedge fund activity in Tredegar Corporation (NYSE:TG)
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TG over the last 15 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Among these funds, GAMCO Investors held the most valuable stake in Tredegar Corporation (NYSE:TG), which was worth $61 million at the end of the first quarter. On the second spot was PEAK6 Capital Management which amassed $1.9 million worth of shares. Moreover, Renaissance Technologies, Millennium Management, and Arrowstreet Capital were also bullish on Tredegar Corporation (NYSE:TG), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, specific money managers have jumped into Tredegar Corporation (NYSE:TG) headfirst. PEAK6 Capital Management, managed by Matthew Hulsizer, assembled the most outsized call position in Tredegar Corporation (NYSE:TG). PEAK6 Capital Management had $1.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding’s Winton Capital Management and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Tredegar Corporation (NYSE:TG) but similarly valued. We will take a look at Fortuna Silver Mines Inc. (NYSE:FSM), Lands’ End, Inc. (NASDAQ:LE), Koppers Holdings Inc. (NYSE:KOP), and The First Bancshares, Inc. (NASDAQ:FBMS). This group of stocks’ market values resemble TG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSM | 13 | 42285 | -2 |
| LE | 14 | 107631 | 1 |
| KOP | 13 | 40875 | 2 |
| FBMS | 8 | 29781 | 3 |
| Average | 12 | 55143 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $68 million in TG’s case. Lands’ End, Inc. (NASDAQ:LE) is the most popular stock in this table. On the other hand The First Bancshares, Inc. (NASDAQ:FBMS) is the least popular one with only 8 bullish hedge fund positions. Tredegar Corporation (NYSE:TG) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TG wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TG investors were disappointed as the stock returned 1.1% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
