Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Triumph Group Inc (NYSE:TGI) changed recently.
Triumph Group Inc (NYSE:TGI) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. Triumph Group Inc (NYSE:TGI) was in 24 hedge funds’ portfolios at the end of September. The all time high for this statistic is 26. Our calculations also showed that TGI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s check out the key hedge fund action surrounding Triumph Group Inc (NYSE:TGI).
Do Hedge Funds Think TGI Is A Good Stock To Buy Now?
At the end of September, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TGI over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Maple Rock Capital was the largest shareholder of Triumph Group Inc (NYSE:TGI), with a stake worth $45.6 million reported as of the end of September. Trailing Maple Rock Capital was Hill City Capital, which amassed a stake valued at $29 million. ACK Asset Management, Royce & Associates, and Pentwater Capital Management 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 Hill City Capital allocated the biggest weight to Triumph Group Inc (NYSE:TGI), around 7.35% of its 13F portfolio. ACK Asset Management is also relatively very bullish on the stock, setting aside 7.14 percent of its 13F equity portfolio to TGI.
Consequently, key hedge funds have been driving this bullishness. Moore Global Investments, managed by Louis Bacon, assembled the largest position in Triumph Group Inc (NYSE:TGI). Moore Global Investments had $5.6 million invested in the company at the end of the quarter. Peter Avellone’s Cartenna Capital also made a $4.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Cowley’s Sandbar Asset Management, Dmitry Balyasny’s Balyasny Asset Management, and Joel Greenblatt’s Gotham Asset Management.
Let’s also examine hedge fund activity in other stocks similar to Triumph Group Inc (NYSE:TGI). These stocks are Standex International Corp. (NYSE:SXI), Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT), BlackSky Technology Inc. (NYSE:BKSY), Model N Inc (NYSE:MODN), City Holding Company (NASDAQ:CHCO), Warrior Met Coal Inc. (NYSE:HCC), and FARO Technologies, Inc. (NASDAQ:FARO). This group of stocks’ market caps resemble TGI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SXI | 13 | 65942 | 3 |
| ARQT | 12 | 470874 | -1 |
| BKSY | 21 | 159362 | 21 |
| MODN | 13 | 80725 | 0 |
| CHCO | 10 | 14008 | 3 |
| HCC | 29 | 221878 | 8 |
| FARO | 9 | 143046 | -4 |
| Average | 15.3 | 165119 | 4.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $165 million. That figure was $188 million in TGI’s case. Warrior Met Coal Inc. (NYSE:HCC) is the most popular stock in this table. On the other hand FARO Technologies, Inc. (NASDAQ:FARO) is the least popular one with only 9 bullish hedge fund positions. Triumph Group Inc (NYSE:TGI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TGI is 72.2. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately TGI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TGI were disappointed as the stock returned -5.9% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Triumph Group Inc (NYSE:TGI)
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Disclosure: None. This article was originally published at Insider Monkey.
