Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Tractor Supply Company (NASDAQ:TSCO) from the perspective of those elite funds.
Tractor Supply Company (NASDAQ:TSCO) shareholders have witnessed a decrease in hedge fund sentiment lately. At the end of this article we will also compare TSCO to other stocks including Autodesk, Inc. (NASDAQ:ADSK), Host Hotels and Resorts Inc (NYSE:HST), and Skyworks Solutions Inc (NASDAQ:SWKS) to get a better sense of its popularity.
Follow Tractor Supply Co (NASDAQ:TSCO)
Follow Tractor Supply Co (NASDAQ:TSCO)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to view the latest action encompassing Tractor Supply Company (NASDAQ:TSCO).
What does the smart money think about Tractor Supply Company (NASDAQ:TSCO)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, down 14% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Select Equity Group, managed by Robert Joseph Caruso, holds the number one position in Tractor Supply Company (NASDAQ:TSCO). According to its latest 13F filing, the fund has a $178 million position in the stock, comprising 1.5% of its 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $126.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Steve Cohen’s Point72 Asset Management, Jim Simons’s Renaissance Technologies and Joel Greenblatt’s Gotham Asset Management.
Due to the fact that Tractor Supply Company (NASDAQ:TSCO) has faced falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers who sold off their entire stakes last quarter. Intriguingly, Principal Global Investors’s Columbus Circle Investors said goodbye to the biggest investment of the “upper crust” of funds monitored by Insider Monkey, valued at close to $48.3 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also said goodbye to its stock, about $28 million worth of TSCO shares. These moves are important to note, as aggregate hedge fund interest fell by 4 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Tractor Supply Company (NASDAQ:TSCO). We will take a look at Autodesk, Inc. (NASDAQ:ADSK), Host Hotels and Resorts Inc (NYSE:HST), Skyworks Solutions Inc (NASDAQ:SWKS), and Vodafone Group Plc (ADR) (NASDAQ:VOD). This group of stocks’ market values are closest to TSCO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADSK | 38 | 4560266 | 3 |
| HST | 17 | 228297 | 3 |
| SWKS | 32 | 457924 | -1 |
| VOD | 18 | 445786 | -4 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $1.42 billion. That figure was $475 million in TSCO’s case. Autodesk, Inc. (NASDAQ:ADSK) is the most popular stock in this table. On the other hand Host Hotels and Resorts Inc (NYSE:HST) is the least popular one with only 17 bullish hedge fund positions. Tractor Supply Company (NASDAQ:TSCO) 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 ADSK might be a better candidate to consider a long position.
Disclosure: none.
