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 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Titan International Inc (NYSE:TWI) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Titan International Inc (NYSE:TWI) a worthy investment right now? Money managers were taking a bullish view. The number of long hedge fund positions increased by 1 recently. Titan International Inc (NYSE:TWI) was in 20 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TWI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 19 hedge funds in our database with TWI positions at the end of the fourth quarter.
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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Mark Rachesky of MHR Fund Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s take a glance at the latest hedge fund action encompassing Titan International Inc (NYSE:TWI).
Do Hedge Funds Think TWI Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in TWI a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Titan International Inc (NYSE:TWI) was held by MHR Fund Management, which reported holding $74.3 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $38.3 million position. Other investors bullish on the company included Millennium Management, D E Shaw, and Horseman Capital Management. In terms of the portfolio weights assigned to each position MHR Fund Management allocated the biggest weight to Titan International Inc (NYSE:TWI), around 4.6% of its 13F portfolio. Horseman Capital Management is also relatively very bullish on the stock, designating 4.04 percent of its 13F equity portfolio to TWI.
Consequently, specific money managers have jumped into Titan International Inc (NYSE:TWI) headfirst. Horseman Capital Management, managed by John Horseman, initiated the largest position in Titan International Inc (NYSE:TWI). Horseman Capital Management had $5 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $0.3 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Nick Thakore’s Diametric Capital, and Peter Algert’s Algert Global.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Titan International Inc (NYSE:TWI) but similarly valued. These stocks are Consolidated Communications Holdings Inc (NASDAQ:CNSL), Allot Ltd. (NASDAQ:ALLT), Evolus, Inc. (NASDAQ:EOLS), Conn’s, Inc. (NASDAQ:CONN), Orchid Island Capital, Inc. (NYSE:ORC), Marinus Pharmaceuticals Inc (NASDAQ:MRNS), and Atomera Incorporated (NASDAQ:ATOM). This group of stocks’ market caps resemble TWI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNSL | 12 | 45296 | -1 |
| ALLT | 13 | 190113 | -1 |
| EOLS | 7 | 13562 | -3 |
| CONN | 12 | 40397 | 1 |
| ORC | 8 | 19857 | -2 |
| MRNS | 16 | 212948 | -1 |
| ATOM | 6 | 8340 | 2 |
| Average | 10.6 | 75788 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $150 million in TWI’s case. Marinus Pharmaceuticals Inc (NASDAQ:MRNS) is the most popular stock in this table. On the other hand Atomera Incorporated (NASDAQ:ATOM) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Titan International Inc (NYSE:TWI) is more popular among hedge funds. Our overall hedge fund sentiment score for TWI is 86. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately TWI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TWI were disappointed as the stock returned -20.8% since the end of the first quarter (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
