TTM Technologies, Inc. (TTMI): Are Hedge Funds Right About This Stock?

It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in TTM Technologies, Inc. (NASDAQ:TTMI).

TTM Technologies, Inc. (NASDAQ:TTMI) investors should be aware of a decrease in enthusiasm from smart money in recent months. TTMI was in 17 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with TTMI positions at the end of the previous quarter. At the end of this article we will also compare TTMI to other stocks including Workiva Inc (NYSE:WK), Tidewater Inc. (NYSE:TDW), and ProNAi Therapeutics Inc (NASDAQ:DNAI) to get a better sense of its popularity.

With all of this in mind, we’re going to take a look at the fresh action regarding TTM Technologies, Inc. (NASDAQ:TTMI).

What have hedge funds been doing with TTM Technologies, Inc. (NASDAQ:TTMI)?

At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -26% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the most valuable position in TTM Technologies, Inc. (NASDAQ:TTMI), worth close to $16.3 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which holds a $6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other peers that hold long positions contain Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Since TTM Technologies, Inc. (NASDAQ:TTMI) has witnessed falling interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedgies who were dropping their positions entirely by the end of the third quarter. Intriguingly, Joel Greenblatt’s Gotham Asset Management dropped the biggest investment of all the hedgies watched by Insider Monkey, comprising about $8.3 million in stock. Israel Englander’s fund, Millennium Management, also sold off its stock, about $6.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as TTM Technologies, Inc. (NASDAQ:TTMI) but similarly valued. These stocks are Workiva Inc (NYSE:WK), Tidewater Inc. (NYSE:TDW), ProNAi Therapeutics Inc (NASDAQ:DNAI), and Quanex Building Products Corporation (NYSE:NX). This group of stocks’ market valuations are similar to TTMI’s market valuation.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $32 million in TTMI’s case. Quanex Building Products Corporation (NYSE:NX) is the most popular stock in this table. On the other hand Workiva Inc (NYSE:WK) is the least popular one with only 4 bullish hedge fund positions. TTM Technologies, Inc. (NASDAQ:TTMI) 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 NX might be a better candidate to consider a long position.