Is Triton International Limited (TRTN) Going to Burn These Hedge Funds?

In this article we are going to use hedge fund sentiment as a tool and determine whether Triton International Limited (NYSE:TRTN) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is Triton International Limited (NYSE:TRTN) a buy right now? Money managers were cutting their exposure. The number of bullish hedge fund positions fell by 6 in recent months. Triton International Limited (NYSE:TRTN) was in 24 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that TRTN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 30 hedge funds in our database with TRTN holdings at the end of March.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Charles Davidson of Wexford Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a glance at the latest hedge fund action surrounding Triton International Limited (NYSE:TRTN).

Do Hedge Funds Think TRTN Is A Good Stock To Buy Now?

At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the first quarter of 2020. On the other hand, there were a total of 14 hedge funds with a bullish position in TRTN a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Goodnow Investment Group, managed by Edward Goodnow, holds the most valuable position in Triton International Limited (NYSE:TRTN). Goodnow Investment Group has a $103.8 million position in the stock, comprising 8.7% of its 13F portfolio. The second most bullish fund manager is GLG Partners, led by Noam Gottesman, holding a $25.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise Jeff Osher’s No Street Capital, Anand Parekh’s Alyeska Investment Group and Alexander Mitchell’s Scopus Asset Management. In terms of the portfolio weights assigned to each position Goodnow Investment Group allocated the biggest weight to Triton International Limited (NYSE:TRTN), around 8.71% of its 13F portfolio. No Street Capital is also relatively very bullish on the stock, designating 3.29 percent of its 13F equity portfolio to TRTN.

Due to the fact that Triton International Limited (NYSE:TRTN) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there was a specific group of hedge funds who sold off their full holdings heading into Q3. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management sold off the biggest position of all the hedgies watched by Insider Monkey, valued at about $3 million in stock. Renaissance Technologies, also dropped its stock, about $2.7 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 6 funds heading into Q3.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Triton International Limited (NYSE:TRTN) but similarly valued. We will take a look at Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), Helmerich & Payne, Inc. (NYSE:HP), Rent-A-Center Inc (NASDAQ:RCII), NewMarket Corporation (NYSE:NEU), Atlas Corp. (NYSE:ATCO), Focus Financial Partners Inc. (NASDAQ:FOCS), and Mantech International Corp (NASDAQ:MANT). This group of stocks’ market values are similar to TRTN’s market value.

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As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $352 million. That figure was $275 million in TRTN’s case. Rent-A-Center Inc (NASDAQ:RCII) is the most popular stock in this table. On the other hand Mantech International Corp (NASDAQ:MANT) is the least popular one with only 12 bullish hedge fund positions. Triton International Limited (NYSE:TRTN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TRTN is 58.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on TRTN as the stock returned 8% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.