How Smart Money Is Trading Team, Inc. (TISI)?

Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Team, Inc. (NYSE:TISI) was in 15 hedge funds’ portfolios at the end of September and investors should be aware of an increase in support from the world’s most elite money managers in recent months. There were 10 hedge funds in our database with Team, Inc. (NYSE:TISI) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Live Oak Bancshares Inc (NASDAQ:LOB), Gigamon Inc (NYSE:GIMO), and Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) to gather more data points.

According to most traders, hedge funds are perceived as slow, old investment tools of the past. While there are over 8000 funds with their doors open at the moment, our researchers hone in on the moguls of this club, about 700 funds. These money managers administer the majority of the smart money’s total capital, and by watching their best stock picks, Insider Monkey has found a number of investment strategies that have historically exceeded Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, let’s take a look at the fresh action encompassing Team, Inc. (NYSE:TISI).

How are hedge funds trading Team, Inc. (NYSE:TISI)?

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 50% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the biggest position in Team, Inc. (NYSE:TISI), worth close to $16.1 million and accounting for 0.1% of its total 13F portfolio. The second most bullish fund manager is Lee Munder Capital Group, run by Lee Munder, which holds a $11.4 million position; 0.2% of its 13F portfolio is allocated to the company. Hedge funds and other institutional investors that hold long positions contain Jim Simons’ Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Ken Brodkowitz and Mike Vermut’s Newland Capital.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Renaissance Technologies established the biggest new position in Team, Inc. (NYSE:TISI). The fund had $1.8 million invested in the company at the end of the quarter. Arrowstreet Capital also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, D E Shaw, and Ken Griffin’s Citadel Investment Group.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Team, Inc. (NYSE:TISI) but similarly valued. We will take a look at Live Oak Bancshares Inc (NASDAQ:LOB), Gigamon Inc (NYSE:GIMO), Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), and Textura Corp (NYSE:TXTR). This group of stocks’ market values resembles Team, Inc. (NYSE:TISI)’s market value.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $74 million in Team, Inc. (NYSE:TISI)’s case. Gigamon Inc (NYSE:GIMO) is the most popular stock in this table, while Textura Corp (NYSE:TXTR) is the least popular one with only 6 bullish hedge fund positions. Team, Inc. (NYSE: TISI) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Gigamon Inc (NYSE:GIMO) might be a better candidate to consider a long position.