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 third 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 Tempur Sealy International Inc. (NYSE:TPX) based on that data.
Tempur Sealy International Inc. (NYSE:TPX) has experienced an increase in support from the world’s most elite money managers recently. Tempur Sealy International Inc. (NYSE:TPX) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 46. Our calculations also showed that TPX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s take a look at the recent hedge fund action regarding Tempur Sealy International Inc. (NYSE:TPX).
Daniel Sundheim of D1 Capital Partners
Do Hedge Funds Think TPX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the second quarter of 2021. On the other hand, there were a total of 46 hedge funds with a bullish position in TPX a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Tempur Sealy International Inc. (NYSE:TPX) was held by H Partners Management, which reported holding $357.4 million worth of stock at the end of September. It was followed by Eminence Capital with a $179.4 million position. Other investors bullish on the company included D1 Capital Partners, Abrams Capital Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position H Partners Management allocated the biggest weight to Tempur Sealy International Inc. (NYSE:TPX), around 32.39% of its 13F portfolio. Six Columns Capital is also relatively very bullish on the stock, setting aside 6.96 percent of its 13F equity portfolio to TPX.
As industrywide interest jumped, specific money managers have jumped into Tempur Sealy International Inc. (NYSE:TPX) headfirst. D1 Capital Partners, managed by Daniel Sundheim, initiated the largest position in Tempur Sealy International Inc. (NYSE:TPX). D1 Capital Partners had $167.1 million invested in the company at the end of the quarter. David Abrams’s Abrams Capital Management also initiated a $167.1 million position during the quarter. The following funds were also among the new TPX investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Matthew Hulsizer’s PEAK6 Capital Management, and Alexander Shapiro’s Anabranch Capital.
Let’s also examine hedge fund activity in other stocks similar to Tempur Sealy International Inc. (NYSE:TPX). These stocks are Concentrix Corporation (NASDAQ:CNXC), AECOM (NYSE:ACM), Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN), Algonquin Power & Utilities Corp. (NYSE:AQN), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), Sunrun Inc (NASDAQ:RUN), and Ascendis Pharma A/S (NASDAQ:ASND). This group of stocks’ market caps resemble TPX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNXC | 21 | 586853 | 0 |
| ACM | 39 | 783809 | 7 |
| BHVN | 33 | 1063983 | 6 |
| AQN | 15 | 152646 | -9 |
| NBIX | 31 | 980578 | -1 |
| RUN | 37 | 1677910 | -8 |
| ASND | 23 | 2827508 | -6 |
| Average | 28.4 | 1153327 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $1153 million. That figure was $1299 million in TPX’s case. AECOM (NYSE:ACM) is the most popular stock in this table. On the other hand Algonquin Power & Utilities Corp. (NYSE:AQN) is the least popular one with only 15 bullish hedge fund positions. Tempur Sealy International Inc. (NYSE:TPX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TPX is 77. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately TPX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TPX were disappointed as the stock returned -7.5% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Tempur Sealy International Inc. (NYSE:TPX)
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Disclosure: None. This article was originally published at Insider Monkey.
