With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was TC Energy Corporation (NYSE:TRP).
Is TC Energy Corporation (NYSE:TRP) undervalued? The best stock pickers are in a bullish mood. The number of long hedge fund positions improved by 6 recently. Our calculations also showed that TRP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a lot of tools shareholders put to use to analyze stocks. Two of the most underrated tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outclass their index-focused peers by a superb margin (see the details here).
Ray Dalio of Bridgewater Associates
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a look at the recent hedge fund action encompassing TC Energy Corporation (NYSE:TRP).
How have hedgies been trading TC Energy Corporation (NYSE:TRP)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards TRP over the last 17 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of TC Energy Corporation (NYSE:TRP), with a stake worth $127.7 million reported as of the end of September. Trailing Citadel Investment Group was D E Shaw, which amassed a stake valued at $65.8 million. Millennium Management, SIR Capital Management, and Bridgewater Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position SIR Capital Management allocated the biggest weight to TC Energy Corporation (NYSE:TRP), around 4.32% of its 13F portfolio. Horseman Capital Management is also relatively very bullish on the stock, designating 1.48 percent of its 13F equity portfolio to TRP.
As aggregate interest increased, key hedge funds have been driving this bullishness. SIR Capital Management, managed by Vince Maddi and Shawn Brennan, assembled the largest position in TC Energy Corporation (NYSE:TRP). SIR Capital Management had $17.6 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors also made a $2.9 million investment in the stock during the quarter. The other funds with brand new TRP positions are Paul Marshall and Ian Wace’s Marshall Wace, David Andre and Astro Teller’s Cerebellum Capital, and Richard Chilton’s Chilton Investment Company.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as TC Energy Corporation (NYSE:TRP) but similarly valued. We will take a look at Infosys Limited (NYSE:INFY), Simon Property Group, Inc (NYSE:SPG), Global Payments Inc (NYSE:GPN), and ServiceNow Inc (NYSE:NOW). This group of stocks’ market valuations match TRP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INFY | 24 | 1437631 | -1 |
| SPG | 25 | 698285 | -1 |
| GPN | 64 | 3524604 | 27 |
| NOW | 86 | 5263766 | 9 |
| Average | 49.75 | 2731072 | 8.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 49.75 hedge funds with bullish positions and the average amount invested in these stocks was $2731 million. That figure was $272 million in TRP’s case. ServiceNow Inc (NYSE:NOW) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks TC Energy Corporation (NYSE:TRP) is even less popular than INFY. Hedge funds dodged a bullet by taking a bearish stance towards TRP. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately TRP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); TRP investors were disappointed as the stock returned -1.7% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
