In this article we will check out the progression of hedge fund sentiment towards Tupperware Brands Corporation (NYSE:TUP) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Tupperware Brands Corporation (NYSE:TUP) a bargain? Investors who are in the know are in a bearish mood. The number of bullish hedge fund bets were trimmed by 6 lately. Our calculations also showed that TUP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). TUP was in 9 hedge funds’ portfolios at the end of the first quarter of 2020. There were 15 hedge funds in our database with TUP positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Tudor Jones of Tudor Investment Corp
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to view the key hedge fund action regarding Tupperware Brands Corporation (NYSE:TUP).
How are hedge funds trading Tupperware Brands Corporation (NYSE:TUP)?
At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -40% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TUP over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in Tupperware Brands Corporation (NYSE:TUP). AQR Capital Management has a $2.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On AQR Capital Management’s heels is Renaissance Technologies, holding a $1.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions encompass John Overdeck and David Siegel’s Two Sigma Advisors, D. E. Shaw’s D E Shaw and David Harding’s Winton Capital Management. In terms of the portfolio weights assigned to each position Shah Capital Management allocated the biggest weight to Tupperware Brands Corporation (NYSE:TUP), around 0.36% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to TUP.
Seeing as Tupperware Brands Corporation (NYSE:TUP) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few funds that decided to sell off their full holdings heading into Q4. At the top of the heap, Israel Englander’s Millennium Management dropped the biggest investment of all the hedgies monitored by Insider Monkey, worth an estimated $2 million in stock. Minhua Zhang’s fund, Weld Capital Management, also dumped its stock, about $1.1 million worth. These moves are interesting, as aggregate hedge fund interest fell by 6 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Tupperware Brands Corporation (NYSE:TUP) but similarly valued. These stocks are StealthGas Inc. (NASDAQ:GASS), Just Energy Group, Inc. (NYSE:JE), Axcella Health Inc. (NASDAQ:AXLA), and Genprex, Inc. (NASDAQ:GNPX). This group of stocks’ market values are similar to TUP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GASS | 6 | 29799 | 1 |
| JE | 4 | 5107 | -3 |
| AXLA | 2 | 318 | -1 |
| GNPX | 2 | 164 | 0 |
| Average | 3.5 | 8847 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $8 million in TUP’s case. StealthGas Inc. (NASDAQ:GASS) is the most popular stock in this table. On the other hand Axcella Health Inc. (NASDAQ:AXLA) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Tupperware Brands Corporation (NYSE:TUP) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.4% in 2020 through June 22nd but still managed to beat the market by 15.9 percentage points. Hedge funds were also right about betting on TUP as the stock returned 182.1% so far in Q2 (through June 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
