We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of TE Connectivity Ltd. (NYSE:TEL) based on that data.
Hedge fund interest in TE Connectivity Ltd. (NYSE:TEL) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that TEL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). 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 BCE Inc. (NYSE:BCE), Match Group, Inc. (NASDAQ:MTCH), and Marriott International Inc (NASDAQ:MAR) to gather more data points.
If you’d ask most investors, hedge funds are assumed to be unimportant, outdated financial tools of yesteryear. While there are over 8000 funds in operation at the moment, Our researchers hone in on the upper echelon of this club, approximately 850 funds. These money managers administer the lion’s share of all hedge funds’ total capital, and by shadowing their inimitable stock picks, Insider Monkey has determined numerous investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Tim Woolley of Polar Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV 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 take a glance at the key hedge fund action encompassing TE Connectivity Ltd. (NYSE:TEL).
Do Hedge Funds Think TEL Is A Good Stock To Buy Now?
At second quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TEL over the last 24 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.
According to Insider Monkey’s hedge fund database, Generation Investment Management, managed by David Blood and Al Gore, holds the biggest position in TE Connectivity Ltd. (NYSE:TEL). Generation Investment Management has a $658.1 million position in the stock, comprising 2.7% of its 13F portfolio. On Generation Investment Management’s heels is Robert Rodriguez and Steven Romick of First Pacific Advisors LLC, with a $396.6 million position; the fund has 5% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Ian Simm’s Impax Asset Management, Dan Loeb’s Third Point and Brian Ashford-Russell and Tim Woolley’s Polar Capital. In terms of the portfolio weights assigned to each position LFL Advisers allocated the biggest weight to TE Connectivity Ltd. (NYSE:TEL), around 14.29% of its 13F portfolio. First Pacific Advisors LLC is also relatively very bullish on the stock, earmarking 4.98 percent of its 13F equity portfolio to TEL.
Judging by the fact that TE Connectivity Ltd. (NYSE:TEL) has faced bearish sentiment from the smart money, logic holds that there is a sect of money managers that slashed their positions entirely last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest investment of all the hedgies followed by Insider Monkey, valued at close to $32.8 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also said goodbye to its stock, about $4 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to TE Connectivity Ltd. (NYSE:TEL). We will take a look at BCE Inc. (NYSE:BCE), Match Group, Inc. (NASDAQ:MTCH), Marriott International Inc (NASDAQ:MAR), L3Harris Technologies, Inc. (NYSE:LHX), Ross Stores, Inc. (NASDAQ:ROST), Trane Technologies plc (NYSE:TT), and MSCI Inc (NYSE:MSCI). This group of stocks’ market valuations are similar to TEL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCE | 14 | 113288 | 4 |
| MTCH | 63 | 3368893 | -5 |
| MAR | 49 | 2454304 | -9 |
| LHX | 42 | 1016540 | 1 |
| ROST | 51 | 1448653 | 3 |
| TT | 37 | 1250491 | 2 |
| MSCI | 37 | 772551 | -1 |
| Average | 41.9 | 1489246 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.9 hedge funds with bullish positions and the average amount invested in these stocks was $1489 million. That figure was $2135 million in TEL’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 14 bullish hedge fund positions. TE Connectivity Ltd. (NYSE:TEL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TEL is 57.1. 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 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. A small number of hedge funds were also right about betting on TEL as the stock returned 8.1% since the end of the second quarter (through 10/11) and outperformed the market by an even larger margin.
Follow Te Connectivity Plc (NYSE:TEL)
Follow Te Connectivity Plc (NYSE:TEL)
Suggested Articles:
- Billionaire Lee Ainslie’s Top 10 Stock Picks
- 10 Best Insurance Stocks To Buy Now
- 15 Largest Coffee Companies in the World in 2021
Disclosure: None. This article was originally published at Insider Monkey.
