Technology stocks had a lousy start to 2022. QQQ lost 9% of its value in January. Pandemic winners are getting crushed while energy stocks are surging. Roblox lost 36%, Moderna lost 33%, and Carvana and Shopify lost 30% of their values in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Trimble Inc. (NASDAQ:TRMB) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Is Trimble Inc. (NASDAQ:TRMB) a buy, sell, or hold? The best stock pickers were getting more bullish. The number of bullish hedge fund positions inched up by 7 lately. Trimble Inc. (NASDAQ:TRMB) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that TRMB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
David Blood of Generation Investment Management
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. With all of this in mind let’s take a glance at the new hedge fund action encompassing Trimble Inc. (NASDAQ:TRMB).
Do Hedge Funds Think TRMB Is A Good Stock To Buy Now?
At third quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in TRMB over the last 25 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Impax Asset Management held the most valuable stake in Trimble Inc. (NASDAQ:TRMB), which was worth $653.4 million at the end of the third quarter. On the second spot was ARK Investment Management which amassed $364.6 million worth of shares. Generation Investment Management, Select Equity Group, 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 Impax Asset Management allocated the biggest weight to Trimble Inc. (NASDAQ:TRMB), around 2.68% of its 13F portfolio. Otter Creek Management is also relatively very bullish on the stock, dishing out 1.43 percent of its 13F equity portfolio to TRMB.
As industrywide interest jumped, key money managers have jumped into Trimble Inc. (NASDAQ:TRMB) headfirst. Renaissance Technologies, initiated the most valuable position in Trimble Inc. (NASDAQ:TRMB). Renaissance Technologies had $17.3 million invested in the company at the end of the quarter. Javier Velazquez’s Albar Capital also initiated a $3.9 million position during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Jinghua Yan’s TwinBeech Capital, and Greg Poole’s Echo Street Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Trimble Inc. (NASDAQ:TRMB) but similarly valued. These stocks are KeyCorp (NYSE:KEY), Fresenius Medical Care AG & Co. (NYSE:FMS), Baker Hughes Company (NYSE:BKR), W.W. Grainger, Inc. (NYSE:GWW), Live Nation Entertainment, Inc. (NYSE:LYV), Ingersoll Rand Inc. (NYSE:IR), and Steris Plc (NYSE:STE). This group of stocks’ market caps are similar to TRMB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KEY | 36 | 399496 | -4 |
| FMS | 4 | 231694 | -1 |
| BKR | 37 | 1013933 | -3 |
| GWW | 28 | 306060 | -1 |
| LYV | 47 | 1308167 | 7 |
| IR | 33 | 732834 | 2 |
| STE | 34 | 1733011 | -1 |
| Average | 31.3 | 817885 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $818 million. That figure was $1815 million in TRMB’s case. Live Nation Entertainment, Inc. (NYSE:LYV) is the most popular stock in this table. On the other hand Fresenius Medical Care AG & Co. (NYSE:FMS) is the least popular one with only 4 bullish hedge fund positions. Trimble Inc. (NASDAQ:TRMB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TRMB is 74. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, TRMB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TRMB were disappointed as the stock returned -12.3% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Trimble Inc. (NASDAQ:TRMB)
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Disclosure: None. This article was originally published at Insider Monkey.
