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 at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Thomson Reuters Corporation (NYSE:TRI) and determine whether the smart money was really smart about this stock.
Thomson Reuters Corporation (NYSE:TRI) shareholders have witnessed an increase in hedge fund sentiment recently. Thomson Reuters Corporation (NYSE:TRI) was in 25 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 22 hedge funds in our database with TRI positions at the end of the first quarter. Our calculations also showed that TRI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Alec Litowitz of Magnetar Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now we’re going to go over the fresh hedge fund action surrounding Thomson Reuters Corporation (NYSE:TRI).
What does smart money think about Thomson Reuters Corporation (NYSE:TRI)?
At Q2’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TRI over the last 20 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Thomson Reuters Corporation (NYSE:TRI) was held by Citadel Investment Group, which reported holding $117.7 million worth of stock at the end of September. It was followed by Echo Street Capital Management with a $90.5 million position. Other investors bullish on the company included Renaissance Technologies, D E Shaw, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Strycker View Capital allocated the biggest weight to Thomson Reuters Corporation (NYSE:TRI), around 5.38% of its 13F portfolio. Lunia Capital is also relatively very bullish on the stock, designating 4.33 percent of its 13F equity portfolio to TRI.
As industrywide interest jumped, some big names have jumped into Thomson Reuters Corporation (NYSE:TRI) headfirst. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), established the largest position in Thomson Reuters Corporation (NYSE:TRI). Schonfeld Strategic Advisors had $2 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $0.7 million position during the quarter. The other funds with brand new TRI positions are Alec Litowitz and Ross Laser’s Magnetar Capital, Renee Yao’s Neo Ivy Capital, and Greg Eisner’s Engineers Gate Manager.
Let’s now review hedge fund activity in other stocks similar to Thomson Reuters Corporation (NYSE:TRI). We will take a look at Banco Bradesco SA (NYSE:BBD), Public Storage (NYSE:PSA), SBA Communications Corporation (NASDAQ:SBAC), Metlife Inc (NYSE:MET), Xcel Energy Inc (NASDAQ:XEL), HCA Healthcare Inc (NYSE:HCA), and NXP Semiconductors NV (NASDAQ:NXPI). This group of stocks’ market values are closest to TRI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BBD | 18 | 235952 | 3 |
| PSA | 26 | 712541 | -1 |
| SBAC | 57 | 2165651 | 11 |
| MET | 31 | 970822 | -3 |
| XEL | 23 | 273421 | -1 |
| HCA | 71 | 2240096 | -16 |
| NXPI | 67 | 2214977 | 15 |
| Average | 41.9 | 1259066 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.9 hedge funds with bullish positions and the average amount invested in these stocks was $1259 million. That figure was $441 million in TRI’s case. HCA Healthcare Inc (NYSE:HCA) is the most popular stock in this table. On the other hand Banco Bradesco SA (NYSE:BBD) is the least popular one with only 18 bullish hedge fund positions. Thomson Reuters Corporation (NYSE:TRI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TRI is 44.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. A small number of hedge funds were also right about betting on TRI as the stock returned 16.3% since the end of June (through September 25th) and outperformed the market by an even larger margin.
Follow Thomson Reuters Corp (NYSE:TRI)
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Disclosure: None. This article was originally published at Insider Monkey.
