The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Triumph Bancorp Inc (NASDAQ:TBK) based on those filings.
Triumph Bancorp Inc (NASDAQ:TBK) was in 6 hedge funds’ portfolios at the end of March. TBK investors should pay attention to a decrease in hedge fund interest recently. There were 7 hedge funds in our database with TBK holdings at the end of the previous quarter. Our calculations also showed that TBK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Richard Driehaus of Driehaus Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a gander at the recent hedge fund action surrounding Triumph Bancorp Inc (NASDAQ:TBK).
How are hedge funds trading Triumph Bancorp Inc (NASDAQ:TBK)?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TBK over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Triumph Bancorp Inc (NASDAQ:TBK) was held by Driehaus Capital, which reported holding $11 million worth of stock at the end of September. It was followed by Mendon Capital Advisors with a $5.8 million position. Other investors bullish on the company included Forest Hill Capital, Citadel Investment Group, and Millennium Management. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Triumph Bancorp Inc (NASDAQ:TBK), around 2.95% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, earmarking 2.84 percent of its 13F equity portfolio to TBK.
Since Triumph Bancorp Inc (NASDAQ:TBK) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of money managers that elected to cut their positions entirely by the end of the first quarter. At the top of the heap, Richard S. Meisenberg’s ACK Asset Management dropped the biggest stake of all the hedgies monitored by Insider Monkey, valued at about $12.6 million in stock. Donald Sussman’s fund, Paloma Partners, also dumped its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Triumph Bancorp Inc (NASDAQ:TBK) but similarly valued. We will take a look at Eagle Pharmaceuticals Inc (NASDAQ:EGRX), The Andersons, Inc. (NASDAQ:ANDE), Retrophin Inc (NASDAQ:RTRX), and Aerie Pharmaceuticals Inc (NASDAQ:AERI). This group of stocks’ market caps are similar to TBK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EGRX | 15 | 108673 | 1 |
| ANDE | 6 | 10449 | -7 |
| RTRX | 22 | 257866 | 0 |
| AERI | 24 | 158071 | 3 |
| Average | 16.75 | 133765 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $134 million. That figure was $24 million in TBK’s case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand The Andersons, Inc. (NASDAQ:ANDE) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Triumph Bancorp Inc (NASDAQ:TBK) is even less popular than ANDE. Hedge funds dodged a bullet by taking a bearish stance towards TBK. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately TBK wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); TBK investors were disappointed as the stock returned 3% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
