We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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 December 31, so let’s proceed with the discussion of the hedge fund sentiment on TTEC Holdings, Inc. (NASDAQ:TTEC).
TTEC Holdings, Inc. (NASDAQ:TTEC) has seen an increase in hedge fund sentiment recently. Our calculations also showed that TTEC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 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. 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 41 percentage points since March 2017 (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 35.3% through March 3rd. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to analyze the new hedge fund action regarding TTEC Holdings, Inc. (NASDAQ:TTEC).
How have hedgies been trading TTEC Holdings, Inc. (NASDAQ:TTEC)?
At the end of the fourth quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 86% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in TTEC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in TTEC Holdings, Inc. (NASDAQ:TTEC) was held by Renaissance Technologies, which reported holding $18.5 million worth of stock at the end of September. It was followed by Islet Management with a $7.9 million position. Other investors bullish on the company included Citadel Investment Group, Arrowstreet Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Pinz Capital allocated the biggest weight to TTEC Holdings, Inc. (NASDAQ:TTEC), around 0.79% of its 13F portfolio. Islet Management is also relatively very bullish on the stock, designating 0.74 percent of its 13F equity portfolio to TTEC.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Islet Management, managed by Joseph Samuels, initiated the biggest position in TTEC Holdings, Inc. (NASDAQ:TTEC). Islet Management had $7.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $2.9 million position during the quarter. The other funds with brand new TTEC positions are Matthew L Pinz’s Pinz Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Steven Baughman’s Divisar Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TTEC Holdings, Inc. (NASDAQ:TTEC) but similarly valued. These stocks are Kaman Corporation (NYSE:KAMN), Instructure, Inc. (NYSE:INST), 8×8, Inc. (NYSE:EGHT), and Ligand Pharmaceuticals Inc. (NASDAQ:LGND). This group of stocks’ market values match TTEC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KAMN | 19 | 235851 | -3 |
| INST | 34 | 652643 | 16 |
| EGHT | 14 | 363912 | -11 |
| LGND | 23 | 380175 | 2 |
| Average | 22.5 | 408145 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $408 million. That figure was $63 million in TTEC’s case. Instructure, Inc. (NYSE:INST) is the most popular stock in this table. On the other hand 8×8, Inc. (NYSE:EGHT) is the least popular one with only 14 bullish hedge fund positions. TTEC Holdings, Inc. (NASDAQ:TTEC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th but still beat the market by 4.2 percentage points. Hedge funds were also right about betting on TTEC as the stock returned -6.6% in 2020 (through April 6th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
