Is Triangle Capital Corporation (NYSE:TCAP) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Triangle Capital Corporation (NYSE:TCAP) a healthy stock for your portfolio? Investors who are in the know are getting more bullish. The number of bullish hedge fund bets went up by 1 lately. 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 Mercury Systems Inc (NASDAQ:MRCY), PC Connection, Inc. (NASDAQ:PCCC), and Fly Leasing Ltd (ADR) (NYSE:FLY) to gather more data points.
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At the moment there are plenty of indicators stock market investors have at their disposal to size up publicly traded companies. A couple of the less known indicators are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform the broader indices by a superb amount (see the details here).
Keeping this in mind, we’re going to take a look at the latest action encompassing Triangle Capital Corporation (NYSE:TCAP).
How are hedge funds trading Triangle Capital Corporation (NYSE:TCAP)?
Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, ClearBridge holds the largest position in Triangle Capital Corporation (NYSE:TCAP). Legg Mason Capital Management has a $5.4 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is PDT Partners, led by Peter Muller, holding a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish contain Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
As one would reasonably expect, key hedge funds have jumped into Triangle Capital Corporation (NYSE:TCAP) headfirst. PDT Partners established the most valuable position in Triangle Capital Corporation (NYSE:TCAP). Citadel Investment Group also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Millennium Management, D E Shaw, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Triangle Capital Corporation (NYSE:TCAP) but similarly valued. These stocks are Mercury Systems Inc (NASDAQ:MRCY), PC Connection, Inc. (NASDAQ:PCCC), Fly Leasing Ltd(ADR) (NYSE:FLY), and Piper Jaffray Companies (NYSE:PJC). This group of stocks’ market valuations are closest to TCAP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRCY | 18 | 125643 | 4 |
| PCCC | 8 | 58525 | 0 |
| FLY | 10 | 49545 | -1 |
| PJC | 17 | 48505 | 5 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $71 million, higher than the $7 million in TCAP’s case. Mercury Systems Inc (NASDAQ:MRCY) is the most popular stock in this table, while PC Connection, Inc. (NASDAQ:PCCC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Triangle Capital Corporation (NYSE:TCAP) is even less popular than PCCC. Considering that hedge funds aren’t fond of this stock in relation to other companies covered 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.
