The TJX Companies, Inc. (TJX): Hedge Funds Are Snapping Up

In this article we will check out the progression of hedge fund sentiment towards The TJX Companies, Inc. (NYSE:TJX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

The TJX Companies, Inc. (NYSE:TJX) has seen an increase in hedge fund interest in recent months. The TJX Companies, Inc. (NYSE:TJX) was in 63 hedge funds’ portfolios at the end of September. The all time high for this statistic is 78. Our calculations also showed that TJX 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. Keeping this in mind we’re going to go over the new hedge fund action surrounding The TJX Companies, Inc. (NYSE:TJX).

Noam Gottesman of GLG Partners

Do Hedge Funds Think TJX Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 63 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. By comparison, 78 hedge funds held shares or bullish call options in TJX a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Alkeon Capital Management held the most valuable stake in The TJX Companies, Inc. (NYSE:TJX), which was worth $434.4 million at the end of the third quarter. On the second spot was Holocene Advisors which amassed $331.7 million worth of shares. D E Shaw, GLG Partners, and Arrowstreet Capital 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 Broad Bay Capital allocated the biggest weight to The TJX Companies, Inc. (NYSE:TJX), around 9.19% of its 13F portfolio. Rip Road Capital is also relatively very bullish on the stock, dishing out 5.28 percent of its 13F equity portfolio to TJX.

As industrywide interest jumped, specific money managers have jumped into The TJX Companies, Inc. (NYSE:TJX) headfirst. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, initiated the most outsized position in The TJX Companies, Inc. (NYSE:TJX). Senator Investment Group had $79.2 million invested in the company at the end of the quarter. Gabriel Plotkin’s Melvin Capital Management also made a $72.6 million investment in the stock during the quarter. The other funds with brand new TJX positions are James Parsons’s Junto Capital Management, Robert Pohly’s Samlyn Capital, and Steve Cohen’s Point72 Asset Management.

Let’s check out hedge fund activity in other stocks similar to The TJX Companies, Inc. (NYSE:TJX). We will take a look at Truist Financial Corporation (NYSE:TFC), HCA Healthcare Inc (NYSE:HCA), Zoom Video Communications, Inc. (NASDAQ:ZM), Marsh & McLennan Companies, Inc. (NYSE:MMC), General Motors Company (NYSE:GM), Fidelity National Information Services Inc. (NYSE:FIS), and Duke Energy Corporation (NYSE:DUK). All of these stocks’ market caps are similar to TJX’s market cap.

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As you can see these stocks had an average of 54.6 hedge funds with bullish positions and the average amount invested in these stocks was $3532 million. That figure was $2330 million in TJX’s case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand Duke Energy Corporation (NYSE:DUK) is the least popular one with only 32 bullish hedge fund positions. The TJX Companies, Inc. (NYSE:TJX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TJX is 68.7. 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 TJX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TJX were disappointed as the stock returned 5.6% 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.

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Disclosure: None. This article was originally published at Insider Monkey.