After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Triton International Limited (NYSE:TRTN).
Triton International Limited (NYSE:TRTN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds’ portfolios at the end of the third quarter of 2019. 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 Taubman Centers, Inc. (NYSE:TCO), John Wiley & Sons Inc (NYSE:JW), and Summit Materials Inc (NYSE:SUM) to gather more data points. Our calculations also showed that TRTN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the key hedge fund action surrounding Triton International Limited (NYSE:TRTN).
What does smart money think about Triton International Limited (NYSE:TRTN)?
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 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TRTN over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Triton International Limited (NYSE:TRTN), with a stake worth $13 million reported as of the end of September. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $8.2 million. Spindletop Capital, Millennium Management, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Spindletop Capital allocated the biggest weight to Triton International Limited (NYSE:TRTN), around 7.42% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.38 percent of its 13F equity portfolio to TRTN.
Due to the fact that Triton International Limited (NYSE:TRTN) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds who were dropping their positions entirely by the end of the third quarter. It’s worth mentioning that Joseph Samuels’s Islet Management cut the largest stake of the “upper crust” of funds watched by Insider Monkey, worth an estimated $3.2 million in stock. Minhua Zhang’s fund, Weld Capital Management, also dropped its stock, about $0.5 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Triton International Limited (NYSE:TRTN). These stocks are Taubman Centers, Inc. (NYSE:TCO), John Wiley & Sons Inc (NYSE:JW), Summit Materials Inc (NYSE:SUM), and Stantec Inc. (NYSE:STN). This group of stocks’ market valuations are similar to TRTN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TCO | 21 | 136881 | -4 |
| JW | 18 | 103460 | 1 |
| SUM | 24 | 648854 | 2 |
| STN | 6 | 82873 | 0 |
| Average | 17.25 | 243017 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $243 million. That figure was $51 million in TRTN’s case. Summit Materials Inc (NYSE:SUM) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 6 bullish hedge fund positions. Triton International Limited (NYSE:TRTN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on TRTN as the stock returned 11.9% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
