Is Thermon Group Holdings, Inc. (NYSE:THR) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Thermon Group Holdings, Inc. (NYSE:THR) a healthy stock for your portfolio? The best stock pickers are buying. The number of long hedge fund bets improved by 2 recently. Our calculations also showed that THR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. 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 Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We’re going to take a look at the new hedge fund action surrounding Thermon Group Holdings, Inc. (NYSE:THR).
How are hedge funds trading Thermon Group Holdings, Inc. (NYSE:THR)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards THR over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Thermon Group Holdings, Inc. (NYSE:THR), which was worth $14.8 million at the end of the third quarter. On the second spot was Impax Asset Management which amassed $8.3 million worth of shares. Rutabaga Capital Management, D E Shaw, and Marshall Wace 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 Rutabaga Capital Management allocated the biggest weight to Thermon Group Holdings, Inc. (NYSE:THR), around 2.69% of its 13F portfolio. Impax Asset Management is also relatively very bullish on the stock, dishing out 0.11 percent of its 13F equity portfolio to THR.
Consequently, some big names have jumped into Thermon Group Holdings, Inc. (NYSE:THR) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, initiated the most valuable position in Thermon Group Holdings, Inc. (NYSE:THR). Two Sigma Advisors had $0.7 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also initiated a $0.6 million position during the quarter. The only other fund with a new position in the stock is Michael Gelband’s ExodusPoint Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Thermon Group Holdings, Inc. (NYSE:THR). We will take a look at Urstadt Biddle Properties Inc. (NYSE:UBP), Gladstone Commercial Corporation (NASDAQ:GOOD), Univest Financial Corporation (NASDAQ:UVSP), and CIRCOR International, Inc. (NYSE:CIR). This group of stocks’ market values are similar to THR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UBP | 2 | 12793 | 0 |
| GOOD | 5 | 72623 | 0 |
| UVSP | 10 | 50323 | 1 |
| CIR | 13 | 132391 | 3 |
| Average | 7.5 | 67033 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $39 million in THR’s case. CIRCOR International, Inc. (NYSE:CIR) is the most popular stock in this table. On the other hand Urstadt Biddle Properties Inc. (NYSE:UBP) is the least popular one with only 2 bullish hedge fund positions. Thermon Group Holdings, Inc. (NYSE:THR) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on THR as the stock returned 14.2% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
