Is TTM Technologies, Inc. (TTMI) A Good Stock To Buy?

Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like TTM Technologies, Inc. (NASDAQ:TTMI).

TTM Technologies, Inc. (NASDAQ:TTMI) was included in the 13F portfolios of 20 funds from our database at the end of September. The company saw an increase in support from the world’s most successful money managers last quarter. There had been 15 funds bullish on the stock at the end of June. 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 Gentherm Inc (NASDAQ:THRM), Tree.com Inc (NASDAQ:TREE), and Calavo Growers, Inc. (NASDAQ:CVGW) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, we’re going to view the latest action surrounding TTM Technologies, Inc. (NASDAQ:TTMI).

Hedge fund activity in TTM Technologies, Inc. (NASDAQ:TTMI)

During the third quarter, the number of funds tracked by Insider Monkey long TTM Technologies went up by 33% to 20. By comparison, 11 hedge funds held shares or bullish call options in TTMI heading into this year. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Royce & Associates, led by Chuck Royce, holds the number one position in TTM Technologies, Inc. (NASDAQ:TTMI). Royce & Associates has a $23.1 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is one of the largest hedge funds in the world, Renaissance Technologies, with a $21.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions consist of Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Laurion Capital Management, led by Benjamin A. Smith, assembled the biggest position in TTM Technologies, Inc. (NASDAQ:TTMI). Laurion Capital Management had $3 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $2 million investment in the stock during the quarter. The other funds with brand new TTMI positions are Neil Chriss’ Hutchin Hill Capital, Mike Vranos’ Ellington, and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as TTM Technologies, Inc. (NASDAQ:TTMI) but similarly valued. We will take a look at Gentherm Inc (NASDAQ:THRM), Tree.com Inc (NASDAQ:TREE), Calavo Growers, Inc. (NASDAQ:CVGW), and Astronics Corporation (NASDAQ:ATRO). This group of stocks’ market caps match TTMI’s market cap.

As you can see these stocks had an average of 14 funds with bullish positions and the average amount invested in these stocks was $53 million, which is lower than the $86 million figure in TTMI’s case. Tree.com Inc (NASDAQ:TREE) is the most popular stock in this table. On the other hand Astronics Corporation (NASDAQ:ATRO) is the least popular one with only nine investors holding long positions. Compared to these stocks TTM Technologies, Inc. (NASDAQ:TTMI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: none