Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of TCG BDC, Inc. (NASDAQ:CGBD) based on that data.
TCG BDC, Inc. (NASDAQ:CGBD) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 12. CGBD has seen an increase in activity from the world’s largest hedge funds recently. There were 8 hedge funds in our database with CGBD holdings at the end of March. Our calculations also showed that CGBD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. 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. With all of this in mind we’re going to take a gander at the key hedge fund action regarding TCG BDC, Inc. (NASDAQ:CGBD).
Do Hedge Funds Think CGBD Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. On the other hand, there were a total of 8 hedge funds with a bullish position in CGBD a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Arrowstreet Capital was the largest shareholder of TCG BDC, Inc. (NASDAQ:CGBD), with a stake worth $16.5 million reported as of the end of June. Trailing Arrowstreet Capital was Callodine Capital Management, which amassed a stake valued at $7.9 million. D E Shaw, Two Sigma Advisors, and McKinley Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Callodine Capital Management allocated the biggest weight to TCG BDC, Inc. (NASDAQ:CGBD), around 2.99% of its 13F portfolio. McKinley Capital Management is also relatively very bullish on the stock, designating 0.18 percent of its 13F equity portfolio to CGBD.
Consequently, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most outsized position in TCG BDC, Inc. (NASDAQ:CGBD). Marshall Wace LLP had $0.3 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also initiated a $0.3 million position during the quarter.
Let’s check out hedge fund activity in other stocks similar to TCG BDC, Inc. (NASDAQ:CGBD). We will take a look at Crossamerica Partners LP (NYSE:CAPL), Community Trust Bancorp, Inc. (NASDAQ:CTBI), Vertex Energy Inc (NASDAQ:VTNR), Precision BioSciences, Inc. (NASDAQ:DTIL), American Software, Inc. (NASDAQ:AMSWA), Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), and CuriosityStream Inc. (NASDAQ:CURI). All of these stocks’ market caps are closest to CGBD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAPL | 2 | 1079 | 1 |
| CTBI | 10 | 16124 | 1 |
| VTNR | 13 | 69446 | 8 |
| DTIL | 13 | 29028 | 0 |
| AMSWA | 11 | 49662 | 5 |
| HCCI | 15 | 96951 | 5 |
| CURI | 6 | 7467 | -4 |
| Average | 10 | 38537 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $41 million in CGBD’s case. Heritage-Crystal Clean, Inc. (NASDAQ:HCCI) is the most popular stock in this table. On the other hand Crossamerica Partners LP (NYSE:CAPL) is the least popular one with only 2 bullish hedge fund positions. TCG BDC, Inc. (NASDAQ:CGBD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CGBD is 62.8. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on CGBD as the stock returned 5.3% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
