The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Tennant Company (NYSE:TNC).
Is Tennant Company (NYSE:TNC) a healthy stock for your portfolio? Money managers are definitely becoming less confident. The number of long hedge fund positions suffered a reduction of 2 recently. TNC was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 12 hedge funds in our database with TNC positions at the end of the previous quarter. 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 Super Micro Computer, Inc. (NASDAQ:SMCI), Oxford Industries, Inc. (NYSE:OXM), and Beneficial Mutual Bancorp Inc (NASDAQ:BNCL) to gather more data points.
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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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What does the smart money think about Tennant Company (NYSE:TNC)?
Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 17% from the second quarter of 2016. By comparison, 10 hedge funds held shares or bullish call options in TNC heading into this year. So, let’s see 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, Chuck Royce’s Royce & Associates has the largest position in Tennant Company (NYSE:TNC), worth close to $83.6 million. The second most bullish fund manager is GAMCO Investors, led by Mario Gabelli, which holds a $25.2 million position. Some other members of the smart money that hold long positions include Renaissance Technologies, one of the largest hedge funds in the world, Charles Paquelet’s Skylands Capital and Peter Muller’s PDT Partners. 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.
Due to the fact that Tennant Company (NYSE:TNC) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there was a specific group of hedge funds that decided to sell off their full holdings by the end of the third quarter. Interestingly, Ken Grossman and Glen Schneider’s SG Capital Management cashed in the biggest position of the “upper crust” of funds studied by Insider Monkey, worth about $5.9 million in stock. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $1 million worth.
Let’s go over hedge fund activity in other stocks similar to Tennant Company (NYSE:TNC). These stocks are Super Micro Computer, Inc. (NASDAQ:SMCI), Oxford Industries, Inc. (NYSE:OXM), Beneficial Mutual Bancorp Inc (NASDAQ:BNCL), and Penn National Gaming, Inc (NASDAQ:PENN). All of these stocks’ market caps match TNC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SMCI | 13 | 49744 | 3 |
| OXM | 15 | 123548 | 5 |
| BNCL | 14 | 119077 | -8 |
| PENN | 26 | 326612 | -1 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $117 million in TNC’s case. Penn National Gaming, Inc (NASDAQ:PENN) is the most popular stock in this table. On the other hand Super Micro Computer, Inc. (NASDAQ:SMCI) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Tennant Company (NYSE:TNC) is even less popular than SMCI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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