Hedge Funds Have Never Been This Bullish On Tronox Holdings Plc (TROX)

In this article we will analyze whether Tronox Holdings Plc (NYSE:TROX) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Tronox Holdings Plc (NYSE:TROX) investors should be aware of an increase in hedge fund sentiment in recent months. Tronox Holdings Plc (NYSE:TROX) was in 36 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 25 hedge funds in our database with TROX positions at the end of the fourth quarter. Our calculations also showed that TROX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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 gander at the key hedge fund action encompassing Tronox Holdings Plc (NYSE:TROX).

Do Hedge Funds Think TROX Is A Good Stock To Buy Now?

At the end of March, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 44% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in TROX 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.

According to Insider Monkey’s hedge fund database, Maple Rock Capital, managed by Len Kipp and Xavier Majic, holds the biggest position in Tronox Holdings Plc (NYSE:TROX). Maple Rock Capital has a $64 million position in the stock, comprising 9.3% of its 13F portfolio. Coming in second is Robert Bishop of Impala Asset Management, with a $36.2 million position; 2.4% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism contain Jonathan Barrett and Paul Segal’s Luminus Management, Israel Englander’s Millennium Management and Gregg J. Powers’s Private Capital Management. In terms of the portfolio weights assigned to each position Maple Rock Capital allocated the biggest weight to Tronox Holdings Plc (NYSE:TROX), around 9.29% of its 13F portfolio. Luminus Management is also relatively very bullish on the stock, designating 6.21 percent of its 13F equity portfolio to TROX.

Now, specific money managers have jumped into Tronox Holdings Plc (NYSE:TROX) headfirst. Rubric Capital Management, managed by David Rosen, initiated the largest position in Tronox Holdings Plc (NYSE:TROX). Rubric Capital Management had $9 million invested in the company at the end of the quarter. Jonathan Barrett and Paul Segal’s Luminus Management also made a $6.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew L Pinz’s Pinz Capital, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Tronox Holdings Plc (NYSE:TROX) but similarly valued. These stocks are Moog Inc (NASDAQ:MOG), Primo Water Corporation (NYSE:PRMW), Amicus Therapeutics, Inc. (NASDAQ:FOLD), BRP Group, Inc. (NASDAQ:BRP), Cimpress plc (NASDAQ:CMPR), Mimecast Limited (NASDAQ:MIME), and Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH). This group of stocks’ market values match TROX’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $394 million. That figure was $320 million in TROX’s case. Primo Water Corporation (NYSE:PRMW) is the most popular stock in this table. On the other hand BRP Group, Inc. (NASDAQ:BRP) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Tronox Holdings Plc (NYSE:TROX) is more popular among hedge funds. Our overall hedge fund sentiment score for TROX is 90. 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 returned 19.3% in 2021 through June 25th but still managed to beat the market by 4.8 percentage points. Hedge funds were also right about betting on TROX as the stock returned 19.2% since the end of March (through 6/25) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.