The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 887 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of The Toro Company (NYSE:TTC).
Is TTC stock a buy? The Toro Company (NYSE:TTC) was in 31 hedge funds’ portfolios at the end of December. The all time high for this statistic is 32. TTC has seen a decrease in hedge fund sentiment in recent months. There were 32 hedge funds in our database with TTC positions at the end of the third quarter. Our calculations also showed that TTC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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 124 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Richard Chilton of Chilton Investment Company
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this biotech stock. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Keeping this in mind we’re going to take a gander at the new hedge fund action encompassing The Toro Company (NYSE:TTC).
Do Hedge Funds Think TTC Is A Good Stock To Buy Now?
At Q4’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TTC over the last 22 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
More specifically, Select Equity Group was the largest shareholder of The Toro Company (NYSE:TTC), with a stake worth $563 million reported as of the end of December. Trailing Select Equity Group was Impax Asset Management, which amassed a stake valued at $150.6 million. Fisher Asset Management, Chilton Investment Company, and Renaissance Technologies 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 Bishop Rock Capital allocated the biggest weight to The Toro Company (NYSE:TTC), around 3.58% of its 13F portfolio. Select Equity Group is also relatively very bullish on the stock, dishing out 2.31 percent of its 13F equity portfolio to TTC.
Due to the fact that The Toro Company (NYSE:TTC) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few funds who were dropping their entire stakes by the end of the fourth quarter. Intriguingly, Ken Grossman and Glen Schneider’s SG Capital Management dropped the biggest position of the 750 funds tracked by Insider Monkey, worth about $6.4 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund said goodbye to about $1 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds by the end of the fourth quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as The Toro Company (NYSE:TTC) but similarly valued. These stocks are Anaplan, Inc. (NYSE:PLAN), CBOE Global Markets Inc (NASDAQ:CBOE), Denali Therapeutics Inc. (NASDAQ:DNLI), Mohawk Industries, Inc. (NYSE:MHK), Quanta Services Inc (NYSE:PWR), Globe Life Inc. (NYSE:GL), and Morningstar, Inc. (NASDAQ:MORN). This group of stocks’ market values are closest to TTC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLAN | 63 | 3062296 | 8 |
| CBOE | 38 | 859817 | 5 |
| DNLI | 20 | 249226 | -4 |
| MHK | 39 | 987416 | -2 |
| PWR | 33 | 972610 | 1 |
| GL | 31 | 828725 | 0 |
| MORN | 19 | 892130 | -2 |
| Average | 34.7 | 1121746 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.7 hedge funds with bullish positions and the average amount invested in these stocks was $1122 million. That figure was $1005 million in TTC’s case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand Morningstar, Inc. (NASDAQ:MORN) is the least popular one with only 19 bullish hedge fund positions. The Toro Company (NYSE:TTC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TTC is 46.7. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. A small number of hedge funds were also right about betting on TTC as the stock returned 12.5% since the end of the fourth quarter (through 4/12) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
