Is Teledyne Technologies Incorporated (TDY) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Teledyne Technologies Incorporated (NYSE:TDY).

Teledyne Technologies Incorporated (NYSE:TDY) was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. TDY investors should pay attention to an increase in enthusiasm from smart money recently. There were 10 hedge funds in our database with TDY 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 Ritchie Bros. Auctioneers (USA) (NYSE:RBA), Aspen Technology, Inc. (NASDAQ:AZPN), and Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) to gather more data points.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

Maxx-Studio/Shutterstock.com

How have hedgies been trading Teledyne Technologies Incorporated (NYSE:TDY)?

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 30% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in TDY at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Cardinal Capital, led by Amy Minella, holds the biggest position in Teledyne Technologies Incorporated (NYSE:TDY). Cardinal Capital has a $52.5 million position in the stock, comprising 2.4% of its 13F portfolio. On Cardinal Capital’s heels is Ken Fisher of Fisher Asset Management, with a $35.3 million position. Some other peers with similar optimism include Chuck Royce’s Royce & Associates, Andrew Sandler’s Sandler Capital Management and Cliff Asness’ AQR Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, specific money managers have jumped into Teledyne Technologies Incorporated (NYSE:TDY) headfirst. Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in Teledyne Technologies Incorporated (NYSE:TDY). Arrowstreet Capital had $0.8 million invested in the company at the end of the quarter. James Dondero’s Highland Capital Management also initiated a $0.6 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Teledyne Technologies Incorporated (NYSE:TDY) but similarly valued. These stocks are Ritchie Bros. Auctioneers (USA) (NYSE:RBA), Aspen Technology, Inc. (NASDAQ:AZPN), Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), and Eagle Materials, Inc. (NYSE:EXP). This group of stocks’ market values match TDY’s market value.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $287 million. That figure was $125 million in TDY’s case. Eagle Materials, Inc. (NYSE:EXP) is the most popular stock in this table. On the other hand Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) is the least popular one with only 10 bullish hedge fund positions. Teledyne Technologies Incorporated (NYSE:TDY) 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. In this regard EXP might be a better candidate to consider taking a long position in.

Disclosure: None