Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Thomson Reuters Corporation (NYSE:TRI).
Thomson Reuters Corporation (NYSE:TRI) was in 17 hedge funds’ portfolios at the end of March. TRI has seen a decrease in support from the world’s most elite money managers recently. There were 19 hedge funds in our database with TRI positions at the end of the previous quarter. Our calculations also showed that tri isn’t among the 30 most popular stocks among hedge funds.
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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
Let’s go over the latest hedge fund action encompassing Thomson Reuters Corporation (NYSE:TRI).
What have hedge funds been doing with Thomson Reuters Corporation (NYSE:TRI)?
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in TRI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Thomson Reuters Corporation (NYSE:TRI) was held by Citadel Investment Group, which reported holding $44.5 million worth of stock at the end of March. It was followed by Millennium Management with a $34.1 million position. Other investors bullish on the company included Samlyn Capital, AQR Capital Management, and Two Sigma Advisors.
Judging by the fact that Thomson Reuters Corporation (NYSE:TRI) has witnessed falling interest from hedge fund managers, we can see that there is a sect of money managers that slashed their full holdings heading into Q3. Intriguingly, Philip Hilal’s Clearfield Capital dropped the largest stake of the 700 funds tracked by Insider Monkey, worth close to $23.8 million in stock. Claes Fornell’s fund, CSat Investment Advisory, also dropped its stock, about $1.7 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 2 funds heading into Q3.
Let’s also examine hedge fund activity in other stocks similar to Thomson Reuters Corporation (NYSE:TRI). We will take a look at Monster Beverage Corp (NASDAQ:MNST), Tencent Music Entertainment Group (NYSE:TME), BT Group plc (NYSE:BT), and Xcel Energy Inc (NASDAQ:XEL). This group of stocks’ market values are closest to TRI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MNST | 33 | 2067252 | 1 |
| TME | 20 | 424298 | -5 |
| BT | 14 | 39409 | 5 |
| XEL | 16 | 527326 | -5 |
| Average | 20.75 | 764571 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $765 million. That figure was $227 million in TRI’s case. Monster Beverage Corp (NASDAQ:MNST) is the most popular stock in this table. On the other hand BT Group plc (NYSE:BT) is the least popular one with only 14 bullish hedge fund positions. Thomson Reuters Corporation (NYSE:TRI) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on TRI as the stock returned 13.2% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
