Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
In this article, we will take a look at what smart money investors think about Triumph Group Inc (NYSE:TGI). Overall, during the third quarter, the hedge fund sentiment remained unchanged and 17 funds tracked by Insider Monkey held shares of the company at the end of September. At the end of this article we will also compare TGI to other stocks including ExlService Holdings, Inc. (NASDAQ:EXLS), Evercore Partners Inc. (NYSE:EVR), and Enbridge Energy Management, L.L.C. (NYSE:EEQ) to get a better sense of its popularity.
Follow Triumph Group Inc (NYSE:TGI)
Follow Triumph Group Inc (NYSE:TGI)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, we’re going to review the fresh action encompassing Triumph Group Inc (NYSE:TGI).
How are hedge funds trading Triumph Group Inc (NYSE:TGI)?
As mentioned earlier, heading into the fourth quarter of 2016, a total of 17 funds tracked by Insider Monkey were bullish on Triumph Group, unchanged over the quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in TGI at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Alexander Roepers’ Atlantic Investment Management has the most valuable position in Triumph Group Inc (NYSE:TGI), worth close to $86.4 million, accounting for 11.3% of its total 13F portfolio. The second most bullish fund is Citadel Investment Group, led by Ken Griffin, which holds a $8.8 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism contain Joel Greenblatt’s Gotham Asset Management, Jim Simons’ Renaissance Technologies, and Gregg J. Powers’ Private Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that Triumph Group Inc (NYSE:TGI) has experienced falling interest from the smart money, we can see that there lies a certain “tier” of hedge funds that elected to cut their positions entirely in the third quarter. Interestingly, David Tepper’s Appaloosa Management LP dumped the largest investment of all the hedgies followed by Insider Monkey, valued at an estimated $35.6 million in stock. Doug Gordon, Jon Hilsabeck and Don Jabro’s fund, Shellback Capital, also sold off its stock, about $18 million worth.
Let’s now take a look at hedge fund activity in other stocks similar to Triumph Group Inc (NYSE:TGI). These stocks are ExlService Holdings, Inc. (NASDAQ:EXLS), Evercore Partners Inc. (NYSE:EVR), Enbridge Energy Management, L.L.C. (NYSE:EEQ), and Colony Financial Inc (NYSE:CLNY). This group of stocks’ market values match TGI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXLS | 8 | 56257 | -5 |
| EVR | 19 | 197858 | 0 |
| EEQ | 6 | 23910 | 1 |
| CLNY | 25 | 320571 | -2 |
As you can see these stocks had an average of 15 funds with bullish positions and the average amount invested in these stocks was $150 million. That figure was $125 million in TGI’s case. Colony Financial Inc (NYSE:CLNY) is the most popular stock in this table. On the other hand Enbridge Energy Management, L.L.C. (NYSE:EEQ) is the least popular one with only six investors holding shares. Triumph Group Inc (NYSE:TGI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Colony Financial Inc (NYSE:CLNY) might be a better candidate to consider taking a long position in.
Disclosure: none
