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 Thermon Group Holdings, Inc. (NYSE:THR).
Thermon Group Holdings, Inc. (NYSE:THR) was in 7 hedge funds’ portfolios at the end of December. THR investors should be aware of a decrease in activity from the world’s largest hedge funds of late. There were 10 hedge funds in our database with THR holdings at the end of the previous quarter. Our calculations also showed that THR isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most market participants, hedge funds are perceived as underperforming, old financial tools of years past. While there are greater than 8000 funds trading at the moment, Our experts hone in on the elite of this club, approximately 750 funds. Most estimates calculate that this group of people watch over the lion’s share of all hedge funds’ total capital, and by observing their first-class investments, Insider Monkey has formulated a number of investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by nearly 5 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
Let’s review the latest hedge fund action regarding Thermon Group Holdings, Inc. (NYSE:THR).
How are hedge funds trading Thermon Group Holdings, Inc. (NYSE:THR)?
At Q4’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -30% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in THR over the last 14 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
The largest stake in Thermon Group Holdings, Inc. (NYSE:THR) was held by Rutabaga Capital Management, which reported holding $10.5 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $9.5 million position. Other investors bullish on the company included Impax Asset Management, D E Shaw, and Citadel Investment Group.
Judging by the fact that Thermon Group Holdings, Inc. (NYSE:THR) has faced falling interest from the aggregate hedge fund industry, logic holds that there exists a select few hedge funds that elected to cut their entire stakes in the third quarter. It’s worth mentioning that Richard Driehaus’s Driehaus Capital cut the largest position of the “upper crust” of funds monitored by Insider Monkey, worth close to $2.7 million in stock, and Louis Navellier’s Navellier & Associates was right behind this move, as the fund sold off about $0.3 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Thermon Group Holdings, Inc. (NYSE:THR) but similarly valued. These stocks are TransMontaigne Partners L.P. (NYSE:TLP), Kornit Digital Ltd. (NASDAQ:KRNT), Valhi, Inc. (NYSE:VHI), and Vista Outdoor Inc (NYSE:VSTO). All of these stocks’ market caps are closest to THR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TLP | 4 | 26709 | 3 |
| KRNT | 14 | 50837 | 5 |
| VHI | 9 | 4014 | -1 |
| VSTO | 14 | 56303 | -5 |
| Average | 10.25 | 34466 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $29 million in THR’s case. Kornit Digital Ltd. (NASDAQ:KRNT) is the most popular stock in this table. On the other hand TransMontaigne Partners L.P. (NYSE:TLP) is the least popular one with only 4 bullish hedge fund positions. Thermon Group Holdings, Inc. (NYSE:THR) is not the least popular stock in this group but hedge fund interest is still below 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. A small number of hedge funds were also right about betting on THR as the stock returned 29.4% and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
