The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider Third Point Reinsurance Ltd (NYSE:TPRE) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Third Point Reinsurance Ltd (NYSE:TPRE) a sound investment now? The best stock pickers are taking an optimistic view. The number of bullish hedge fund bets inched up by 4 recently. Our calculations also showed that tpre isn’t among the 30 most popular stocks among hedge funds. TPRE was in 18 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 14 hedge funds in our database with TPRE positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? 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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
We’re going to go over the key hedge fund action surrounding Third Point Reinsurance Ltd (NYSE:TPRE).
Hedge fund activity in Third Point Reinsurance Ltd (NYSE:TPRE)
At Q4’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in TPRE 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.
Of the funds tracked by Insider Monkey, Noam Gottesman’s GLG Partners has the most valuable position in Third Point Reinsurance Ltd (NYSE:TPRE), worth close to $19.4 million, corresponding to 0.1% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which holds a $8.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions comprise Parvinder Thiara’s Athanor Capital, Jim Simons’s Renaissance Technologies and Ron Mass’s Almitas Capital.
Consequently, key money managers were leading the bulls’ herd. Athanor Capital, managed by Parvinder Thiara, created the biggest position in Third Point Reinsurance Ltd (NYSE:TPRE). Athanor Capital had $8.5 million invested in the company at the end of the quarter. Ron Mass’s Almitas Capital also initiated a $3.3 million position during the quarter. The following funds were also among the new TPRE investors: D. E. Shaw’s D E Shaw, Ron Bobman’s Capital Returns Management, and Hoon Kim’s Quantinno Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Third Point Reinsurance Ltd (NYSE:TPRE). These stocks are Scorpio Tankers Inc. (NYSE:STNG), Alamo Group, Inc. (NYSE:ALG), TherapeuticsMD Inc (NASDAQ:TXMD), and Kadant Inc. (NYSE:KAI). All of these stocks’ market caps are closest to TPRE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STNG | 10 | 82830 | -4 |
| ALG | 12 | 158978 | -1 |
| TXMD | 10 | 49227 | -4 |
| KAI | 17 | 87171 | 3 |
| Average | 12.25 | 94552 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $52 million in TPRE’s case. Kadant Inc. (NYSE:KAI) is the most popular stock in this table. On the other hand Scorpio Tankers Inc. (NYSE:STNG) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Third Point Reinsurance Ltd (NYSE:TPRE) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately TPRE wasn’t nearly as popular as these 15 stock and hedge funds that were betting on TPRE were disappointed as the stock returned 13% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
