We can judge whether TransCanada Corporation (USA) (NYSE:TRP) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
TransCanada Corporation (USA) (NYSE:TRP) has experienced a decrease in activity from the world’s largest hedge funds lately. At the end of this article we will also compare TRP to other stocks including AutoZone, Inc. (NYSE:AZO), Canadian Pacific Railway Limited (USA) (NYSE:CP), and Boston Scientific Corporation (NYSE:BSX) to get a better sense of its popularity.
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Now, let’s take a look at the new action encompassing TransCanada Corporation (USA) (NYSE:TRP).
What have hedge funds been doing with TransCanada Corporation (USA) (NYSE:TRP)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Magnetar Capital, managed by Alec Litowitz and Ross Laser, holds the biggest position in TransCanada Corporation (USA) (NYSE:TRP). Magnetar Capital has a $172.8 million position in the stock, comprising 4.5% of its 13F portfolio. Coming in second is Glenview Capital, led by Larry Robbins, holding a $104.6 million position; 0.5% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish encompass Jim Simons’ Renaissance Technologies, Jonathan Barrett and Paul Segal’s Luminus Management and D E Shaw.
Since TransCanada Corporation (USA) (NYSE:TRP) has witnessed a declination in interest from the smart money, it’s safe to say that there lies a certain “tier” of fund managers that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Zach Schreiber’s Point State Capital dumped the largest stake of the 700 funds tracked by Insider Monkey, valued at about $239.9 million in stock, and Ray Dalio’s Bridgewater Associates was right behind this move, as the fund dumped about $8.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to TransCanada Corporation (USA) (NYSE:TRP). We will take a look at AutoZone, Inc. (NYSE:AZO), Canadian Pacific Railway Limited (USA) (NYSE:CP), Boston Scientific Corporation (NYSE:BSX), and PPL Corporation (NYSE:PPL). This group of stocks’ market caps are closest to TRP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AZO | 39 | 1220796 | 3 |
| CP | 39 | 3975017 | -12 |
| BSX | 37 | 1479895 | 2 |
| PPL | 23 | 801609 | 1 |
As you can see these stocks had an average of 34.5 hedge funds with bullish positions and the average amount invested in these stocks was $1,869 million. That figure was $398 million in TRP’s case. AutoZone, Inc. (NYSE:AZO) is the most popular stock in this table. On the other hand PPL Corporation (NYSE:PPL) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks TransCanada Corporation (USA) (NYSE:TRP) is even less popular than PPL. 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. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
