Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Tiffany & Co. (NYSE:TIF) from the perspective of those elite funds.
Tiffany & Co. (NYSE:TIF) has seen an increase in activity from the world’s largest hedge funds of late. 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 Grupo Financiero Santander Mexico, S.A.B. de C.V. ADR (NYSE:BSMX), Bunge Ltd (NYSE:BG), and American Water Works Co., Inc. (NYSE:AWK) to gather more data points.
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Keeping this in mind, let’s analyze the latest action encompassing Tiffany & Co. (NYSE:TIF).
What does the smart money think about Tiffany & Co. (NYSE:TIF)?
Heading into Q4, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the second quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Joel Greenblatt’s Gotham Asset Management has the largest position in Tiffany & Co. (NYSE:TIF), worth close to $33 million, corresponding to 0.3% of its total 13F portfolio. On Gotham Asset Management’s heels is Millennium Management, led by Israel Englander, holding an $31.6 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism encompass Sanford J. Colen’s Apex Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Sanford J. Colen’s Apex Capital.
As aggregate interest increased, some big names were leading the bulls’ herd. Laurion Capital Management, managed by Benjamin A. Smith, assembled the biggest call position in Tiffany & Co. (NYSE:TIF). Laurion Capital Management had $14.8 million invested in the company at the end of the quarter. David Keidan’s Buckingham Capital Management also initiated an $10.9 million position during the quarter. The other funds with brand new TIF positions are Michael Hintze’s CQS Cayman LP, Steve Cohen’s Point72 Asset Management, and Paul Cantor, Joseph Weiss, and Will Wurm’s Beech Hill Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Tiffany & Co. (NYSE:TIF) but similarly valued. We will take a look at Grupo Financiero Santander Mexico, S.A.B. de C.V. ADR (NYSE:BSMX), Bunge Ltd (NYSE:BG), American Water Works Co., Inc. (NYSE:AWK), and Lennar Corporation (NYSE:LEN). This group of stocks’ market values are similar to TIF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BSMX | 10 | 22053 | 1 |
| BG | 28 | 1069577 | -5 |
| AWK | 22 | 291523 | -5 |
| LEN | 49 | 1106175 | 5 |
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $622 million. That figure was $376 million in TIF’s case. Lennar Corporation (NYSE:LEN) is the most popular stock in this table. On the other hand Grupo Financiero Santander Mexico, S.A.B. de C.V. ADR (NYSE:BSMX) is the least popular one with only 10 bullish hedge fund positions. Tiffany & Co. (NYSE:TIF) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LEN might be a better candidate to consider a long position.
