Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that Trump presidency will be good for publicly traded stocks (at least in the very short term) due to lower taxes and higher GDP growth rates. Both investors profited handsomely from this analysis during the 5 hours immediately following Donald Trump’s election victory. The markets, especially small-cap stocks, kept rallying in the following three weeks. Nevertheless, there are still opportunities in individual stocks and we believe the stocks with strong hedge fund bullish stance are a good place to look for investment ideas. In this article we will find out how hedge fund sentiment to Thomson Reuters Corporation (USA) (NYSE:TRI) changed recently.
Hedge fund interest in Thomson Reuters Corporation (USA) (NYSE:TRI) shares was flat during the third quarter. This is usually a negative indicator. 11 hedge funds that we track owned the stock on September 30, same as on June 30. At the end of this article we will also compare TRI to other stocks including Canadian Imperial Bank of Commerce (USA) (NYSE:CM), PG&E Corporation (NYSE:PCG), and The Blackstone Group L.P. (NYSE:BX) to get a better sense of its popularity.
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Hedge fund activity in Thomson Reuters Corporation (USA) (NYSE:TRI)
Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the second quarter of 2016. On the other hand, there were a total of 14 hedge funds with a bullish position in TRI at the beginning of this year, so hedge fund sentiment has declined for the year. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the most valuable position in Thomson Reuters Corporation (USA) (NYSE:TRI), worth close to $65.3 million. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $36.9 million position. Other members of the smart money that are bullish consist of Millennium Management, one of the largest hedge funds in the world, John Overdeck and David Siegel’s Two Sigma Advisors, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners. 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-micro-cap stocks.
Judging by the fact that Thomson Reuters Corporation (USA) (NYSE:TRI) has weathered falling interest from the smart money, we can see that there lies a certain “tier” of money managers who sold off their entire stakes by the end of the third quarter. Intriguingly, David E. Shaw’s D E Shaw cashed in the largest stake of all the hedgies watched by Insider Monkey, worth about $6 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its call options, about $0.5 million worth.
Let’s also examine hedge fund activity in other stocks similar to Thomson Reuters Corporation (USA) (NYSE:TRI). These stocks are Canadian Imperial Bank of Commerce (USA) (NYSE:CM), PG&E Corporation (NYSE:PCG), The Blackstone Group L.P. (NYSE:BX), and LIBERTY GLOBAL PLC (NASDAQ:LBTYK). This group of stocks’ market valuations are closest to TRI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CM | 18 | 286137 | 4 |
| PCG | 23 | 1088480 | -3 |
| BX | 32 | 403795 | 0 |
| LBTYK | 56 | 5713173 | -4 |
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1.87 billion. That figure was $130 million in TRI’s case. LIBERTY GLOBAL PLC (NASDAQ:LBTYK) is the most popular stock in this table. On the other hand Canadian Imperial Bank of Commerce (USA) (NYSE:CM) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Thomson Reuters Corporation (USA) (NYSE:TRI) is even less popular than CM. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.
Disclosure: None
