Should You Avoid Tredegar Corporation (TG)?

Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Tredegar Corporation (NYSE:TG).

Is Tredegar Corporation (NYSE:TG) the right pick for your portfolio? Investors who are in the know seem to be turning less bullish. Among the investors we track, the number of long hedge fund positions that are disclosed in regulatory 13F filings declined by two during the third quarter. At the end of this article we will also compare TG to other stocks including Ciner Resources LP (NYSE:CINR), Seacoast Banking Corporation of Florida (NASDAQ:SBCF), and Ardelyx Inc (NASDAQ:ARDX) to get a better sense of its popularity.

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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With all of this in mind, we’re going to take a gander at the key action surrounding Tredegar Corporation (NYSE:TG).

What have hedge funds been doing with Tredegar Corporation (NYSE:TG)?

Heading into the fourth quarter of 2016, seven hedge funds tracked by Insider Monkey were long this stock, a change of -22% from the previous quarter. There were also seven funds with a bullish position in TG at the beginning of this year. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, GAMCO Investors, led by Mario Gabelli, holds the number one position in Tredegar Corporation (NYSE:TG). GAMCO Investors has a $87.8 million position in the stock, comprising 0.6% of its 13F portfolio. On GAMCO Investors’s heels is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $2.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions encompass Renaissance Technologies, one of the biggest hedge funds in the world, Cliff Asness’ AQR Capital Management, and Ken Griffin’s Citadel Investment Group. 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.