How do we determine whether Tompkins Financial Corporation (NYSE:TMP) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Tompkins Financial Corporation (NYSE:TMP) has seen an increase in enthusiasm from smart money recently. Our calculations also showed that TMP 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.
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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.
Jim Simons of Renaissance Technologies
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 as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now let’s take a peek at the new hedge fund action encompassing Tompkins Financial Corporation (NYSE:TMP).
How have hedgies been trading Tompkins Financial Corporation (NYSE:TMP)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards TMP over the last 17 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Tompkins Financial Corporation (NYSE:TMP), which was worth $17.5 million at the end of the third quarter. On the second spot was Winton Capital Management which amassed $1.6 million worth of shares. PDT Partners, Millennium Management, and Paloma Partners 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 PDT Partners allocated the biggest weight to Tompkins Financial Corporation (NYSE:TMP), around 0.02% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to TMP.
As aggregate interest increased, some big names have jumped into Tompkins Financial Corporation (NYSE:TMP) headfirst. Paloma Partners, managed by Donald Sussman, created the biggest position in Tompkins Financial Corporation (NYSE:TMP). Paloma Partners had $0.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.2 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Tompkins Financial Corporation (NYSE:TMP). These stocks are The Chefs Warehouse, Inc (NASDAQ:CHEF), Liberty Oilfield Services Inc. (NYSE:LBRT), Criteo SA (NASDAQ:CRTO), and Oxford Industries, Inc. (NYSE:OXM). This group of stocks’ market values resemble TMP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHEF | 9 | 58847 | 0 |
| LBRT | 12 | 36429 | 5 |
| CRTO | 12 | 170445 | 3 |
| OXM | 14 | 75460 | 1 |
| Average | 11.75 | 85295 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $20 million in TMP’s case. Oxford Industries, Inc. (NYSE:OXM) is the most popular stock in this table. On the other hand The Chefs Warehouse, Inc (NASDAQ:CHEF) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Tompkins Financial Corporation (NYSE:TMP) is even less popular than CHEF. 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. A small number of hedge funds were also right about betting on TMP, though not to the same extent, as the stock returned 7.6% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
