At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
TeleTech Holdings, Inc. (NASDAQ:TTEC) investors should be aware of an increase in support from the world’s most elite money managers lately. TTEC was in 14 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with TTEC positions at the end of the previous quarter. Our calculations also showed that TTEC isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a glance at the recent hedge fund action surrounding TeleTech Holdings, Inc. (NASDAQ:TTEC).
What does the smart money think about TeleTech Holdings, Inc. (NASDAQ:TTEC)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the second quarter of 2018. By comparison, 12 hedge funds held shares or bullish call options in TTEC heading into this year. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in TeleTech Holdings, Inc. (NASDAQ:TTEC) was held by Renaissance Technologies, which reported holding $8.9 million worth of stock at the end of September. It was followed by Millennium Management with a $3.5 million position. Other investors bullish on the company included Leucadia National, Citadel Investment Group, and D E Shaw.
As industrywide interest jumped, key hedge funds have been driving this bullishness. D E Shaw, managed by D. E. Shaw, established the most outsized call position in TeleTech Holdings, Inc. (NASDAQ:TTEC). D E Shaw had $0.8 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $0.7 million position during the quarter. The only other fund with a new position in the stock is Thomas Bailard’s Bailard Inc.
Let’s now review hedge fund activity in other stocks similar to TeleTech Holdings, Inc. (NASDAQ:TTEC). We will take a look at Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), Viad Corp (NYSE:VVI), Amerisafe, Inc. (NASDAQ:AMSF), and Autolus Therapeutics plc (NASDAQ:AUTL). This group of stocks’ market valuations resemble TTEC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNDA | 20 | 357102 | 0 |
| VVI | 12 | 186337 | 0 |
| AMSF | 11 | 13781 | 2 |
| AUTL | 11 | 400451 | -3 |
| Average | 13.5 | 239418 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $239 million. That figure was $20 million in TTEC’s case. Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is the most popular stock in this table. On the other hand Amerisafe, Inc. (NASDAQ:AMSF) is the least popular one with only 11 bullish hedge fund positions. TeleTech Holdings, Inc. (NASDAQ:TTEC) 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 VNDA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
