Is TTEK Stock A Buy or Sell?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Tetra Tech, Inc. (NASDAQ:TTEK) to find out whether there were any major changes in hedge funds’ views.

Is TTEK stock a buy? Tetra Tech, Inc. (NASDAQ:TTEK) investors should be aware of an increase in hedge fund interest recently. Tetra Tech, Inc. (NASDAQ:TTEK) was in 29 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 22 hedge funds in our database with TTEK positions at the end of the third quarter. Our calculations also showed that TTEK 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.

Andrew Sandler of Sandler Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. 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 let’s check out the latest hedge fund action encompassing Tetra Tech, Inc. (NASDAQ:TTEK).

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

At Q4’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 32% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TTEK over the last 22 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Tetra Tech, Inc. (NASDAQ:TTEK) was held by Value Holdings LP, which reported holding $22.4 million worth of stock at the end of December. It was followed by Millennium Management with a $13.3 million position. Other investors bullish on the company included Citadel Investment Group, Sandler Capital Management, and Running Oak Capital. In terms of the portfolio weights assigned to each position Value Holdings LP allocated the biggest weight to Tetra Tech, Inc. (NASDAQ:TTEK), around 8.1% of its 13F portfolio. Running Oak Capital is also relatively very bullish on the stock, dishing out 1.94 percent of its 13F equity portfolio to TTEK.

Consequently, key money managers have jumped into Tetra Tech, Inc. (NASDAQ:TTEK) headfirst. Citadel Investment Group, managed by Ken Griffin, initiated the most outsized position in Tetra Tech, Inc. (NASDAQ:TTEK). Citadel Investment Group had $11.4 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $1.8 million position during the quarter. The other funds with brand new TTEK positions are Dmitry Balyasny’s Balyasny Asset Management, Principal Global Investors’s Columbus Circle Investors, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s check out hedge fund activity in other stocks similar to Tetra Tech, Inc. (NASDAQ:TTEK). These stocks are Littelfuse, Inc. (NASDAQ:LFUS), AppFolio Inc (NASDAQ:APPF), Pure Storage, Inc. (NYSE:PSTG), Stitch Fix, Inc. (NASDAQ:SFIX), Clearway Energy, Inc. (NYSE:CWEN), AutoNation, Inc. (NYSE:AN), and Vertiv Holdings Co (NYSE:VRT). All of these stocks’ market caps match TTEK’s market cap.

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As you can see these stocks had an average of 26.9 hedge funds with bullish positions and the average amount invested in these stocks was $714 million. That figure was $99 million in TTEK’s case. Vertiv Holdings Co (NYSE:VRT) is the most popular stock in this table. On the other hand AppFolio Inc (NASDAQ:APPF) is the least popular one with only 19 bullish hedge fund positions. Tetra Tech, Inc. (NASDAQ:TTEK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TTEK is 56.1. 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. Hedge funds were also right about betting on TTEK as the stock returned 24.3% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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