In this article we are going to use hedge fund sentiment as a tool and determine whether Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of March. Our calculations also showed that TLK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare TLK to other stocks including CDW Corporation (NASDAQ:CDW), Zscaler, Inc. (NASDAQ:ZS), and PG&E Corporation (NYSE:PCG) to get a better sense of its popularity.
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Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. 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 homepage. Keeping this in mind let’s analyze the new hedge fund action encompassing Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK).
Do Hedge Funds Think TLK Is A Good Stock To Buy Now?
At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in TLK a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the number one position in Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), worth close to $116 million, amounting to 0.1% of its total 13F portfolio. The second most bullish fund manager is Oldfield Partners, led by Richard Oldfield, holding a $41.2 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism comprise Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Oldfield Partners allocated the biggest weight to Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), around 4.27% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to TLK.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks similar to Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK). We will take a look at CDW Corporation (NASDAQ:CDW), Zscaler, Inc. (NASDAQ:ZS), PG&E Corporation (NYSE:PCG), Arista Networks Inc (NYSE:ANET), Yandex NV (NASDAQ:YNDX), Li Auto Inc. (NASDAQ:LI), and United Microelectronics Corp (NYSE:UMC). All of these stocks’ market caps resemble TLK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CDW | 30 | 1908866 | -13 |
| ZS | 34 | 809507 | -1 |
| PCG | 65 | 5665287 | -1 |
| ANET | 26 | 253852 | -9 |
| YNDX | 29 | 1260108 | -5 |
| LI | 18 | 493824 | -13 |
| UMC | 11 | 173050 | -1 |
| Average | 30.4 | 1509213 | -6.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.4 hedge funds with bullish positions and the average amount invested in these stocks was $1509 million. That figure was $158 million in TLK’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand United Microelectronics Corp (NYSE:UMC) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is even less popular than UMC. Our overall hedge fund sentiment score for TLK is 15.9. 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 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 17.2% in 2021 through June 11th but managed to beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on TLK, though not to the same extent, as the stock returned 8.4% since the end of March (through June 11th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
