The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded The Toro Company (NYSE:TTC) based on those filings.
The Toro Company (NYSE:TTC) was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. TTC has seen a decrease in activity from the world’s largest hedge funds recently. There were 22 hedge funds in our database with TTC positions at the end of the previous quarter. At the end of this article we will also compare TTC to other stocks, including Hospitality Properties Trust (NYSE:HPT), Graco Inc. (NYSE:GGG), and NCR Corporation (NYSE:NCR) to get a better sense of its popularity.
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Today there are a lot of gauges shareholders use to size up their stock investments. Two of the less known gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the S&P 500 by a healthy margin (see the details here).
With all of this in mind, we’re going to take a look at the recent action encompassing The Toro Company (NYSE:TTC).
What does the smart money think about The Toro Company (NYSE:TTC)?
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 5% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the largest position in The Toro Company (NYSE:TTC), worth close to $63.6 million, accounting for 0.1% of its total 13F portfolio. On Fisher Asset Management’s heels is Impax Asset Management, led by Ian Simm, holding a stake worth $45.1 million; 3.1% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism consist of Chuck Royce’s Royce & Associates, Richard Chilton’s Chilton Investment Company and Jim Simons’ Renaissance Technologies.
Since The Toro Company (NYSE:TTC) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers who were dropping their positions entirely in the third quarter. It’s worth mentioning that Roger Ibbotson’s Zebra Capital Management dumped the biggest investment of all the hedgies followed by Insider Monkey, worth close to $1 million in stock, and Matthew Tewksbury’s Stevens Capital Management was right behind this move, as the fund dropped about $0.6 million worth of TTC shares. These moves are intriguing to say the least, as total hedge fund interest dropped by 1 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to The Toro Company (NYSE:TTC). These stocks are Hospitality Properties Trust (NYSE:HPT), Graco Inc. (NYSE:GGG), NCR Corporation (NYSE:NCR), and Molina Healthcare, Inc. (NYSE:MOH). This group of stocks’ market caps resemble TTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HPT | 17 | 77923 | 1 |
| GGG | 16 | 154015 | 7 |
| NCR | 42 | 1017246 | -2 |
| MOH | 30 | 443900 | 2 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $423 million. That figure was $184 million in TTC’s case, significantly lower than the average. NCR Corporation (NYSE:NCR) is the most popular stock in this table, while Graco Inc. (NYSE:GGG) is at the other end of the specter with only 16 bullish hedge fund positions. The Toro Company (NYSE:TTC) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NCR might be a better candidate to consider a long position.
