The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 730 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 28th, 2019. In this article we are going to take a look at smart money sentiment towards Tata Motors Limited (NYSE:TTM).
Tata Motors Limited (NYSE:TTM) has experienced a decrease in hedge fund interest of late. Our calculations also showed that TTM isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a gander at the new hedge fund action surrounding Tata Motors Limited (NYSE:TTM).
How are hedge funds trading Tata Motors Limited (NYSE:TTM)?
Heading into the third quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in TTM a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the most valuable position in Tata Motors Limited (NYSE:TTM), worth close to $63.2 million, corresponding to 0.1% of its total 13F portfolio. The second largest stake is held by Ben Levine, Andrew Manuel and Stefan Renold of LMR Partners, with a $43.5 million position; 1.6% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and Boaz Weinstein’s Saba Capital.
Due to the fact that Tata Motors Limited (NYSE:TTM) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there were a few hedgies who were dropping their full holdings in the second quarter. Intriguingly, Gifford Combs’s Dalton Investments dumped the largest position of the “upper crust” of funds followed by Insider Monkey, totaling close to $0.6 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund said goodbye to about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tata Motors Limited (NYSE:TTM) but similarly valued. These stocks are Carlisle Companies, Inc. (NYSE:CSL), Masimo Corporation (NASDAQ:MASI), Bunge Limited (NYSE:BG), and Mobile TeleSystems Public Joint Stock Company (NYSE:MBT). All of these stocks’ market caps resemble TTM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSL | 25 | 329481 | 3 |
| MASI | 28 | 350309 | -6 |
| BG | 31 | 693472 | -4 |
| MBT | 8 | 448588 | -5 |
| Average | 23 | 455463 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $455 million. That figure was $135 million in TTM’s case. Bunge Limited (NYSE:BG) is the most popular stock in this table. On the other hand Mobile TeleSystems Public Joint Stock Company (NYSE:MBT) is the least popular one with only 8 bullish hedge fund positions. Tata Motors Limited (NYSE:TTM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately TTM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TTM investors were disappointed as the stock returned -28.2% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
