Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Tetra Tech, Inc. (NASDAQ:TTEK).
Tetra Tech, Inc. (NASDAQ:TTEK) investors should pay attention to an increase in enthusiasm from smart money in recent months. Our calculations also showed that TTEK isn’t among the 30 most popular stocks among hedge funds.
Today there are tons of gauges stock market investors use to value stocks. Two of the less known gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the market by a healthy amount (see the details here).
Let’s go over the recent hedge fund action encompassing Tetra Tech, Inc. (NASDAQ:TTEK).
What have hedge funds been doing with Tetra Tech, Inc. (NASDAQ:TTEK)?
At the end of the fourth quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 47% from the second quarter of 2018. On the other hand, there were a total of 14 hedge funds with a bullish position in TTEK a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Tetra Tech, Inc. (NASDAQ:TTEK), which was worth $15.7 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $10.5 million worth of shares. Moreover, Gotham Asset Management, GLG Partners, and Third Avenue Management were also bullish on Tetra Tech, Inc. (NASDAQ:TTEK), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names have been driving this bullishness. Weld Capital Management, managed by Minhua Zhang, assembled the largest position in Tetra Tech, Inc. (NASDAQ:TTEK). Weld Capital Management had $1.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $0.4 million position during the quarter. The other funds with brand new TTEK positions are Brandon Haley’s Holocene Advisors, Dmitry Balyasny’s Balyasny Asset Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s go over hedge fund activity in other stocks similar to Tetra Tech, Inc. (NASDAQ:TTEK). These stocks are Eagle Materials, Inc. (NYSE:EXP), Mercury General Corporation (NYSE:MCY), ASGN Incorporated (NYSE:ASGN), and MOGU Inc. (NYSE:MOG). This group of stocks’ market values are similar to TTEK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXP | 25 | 520317 | -7 |
| MCY | 18 | 153498 | 0 |
| ASGN | 21 | 123517 | 3 |
| MOG | 13 | 56841 | 0 |
| Average | 19.25 | 213543 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $71 million in TTEK’s case. Eagle Materials, Inc. (NYSE:EXP) is the most popular stock in this table. On the other hand MOGU Inc. (NYSE:MOG) is the least popular one with only 13 bullish hedge fund positions. Tetra Tech, Inc. (NASDAQ:TTEK) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on TTEK, though not to the same extent, as the stock returned 21.9% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
