While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, increasing oil prices and optimism towards the resolution of the trade war with China, many smart money investors kept their cautious approach regarding the current bull run in the first quarter and hedging or reducing many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Titan International Inc (NYSE:TWI).
Is Titan International Inc (NYSE:TWI) an exceptional stock to buy now? Money managers are taking a bullish view. The number of long hedge fund positions increased by 5 lately. Our calculations also showed that twi isn’t among the 30 most popular stocks among hedge funds. TWI was in 13 hedge funds’ portfolios at the end of March. There were 8 hedge funds in our database with TWI positions at the end of the previous quarter.
In the eyes of most traders, hedge funds are seen as unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds trading today, Our researchers choose to focus on the elite of this group, about 750 funds. These money managers administer most of all hedge funds’ total capital, and by watching their finest picks, Insider Monkey has unsheathed many investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let’s take a look at the key hedge fund action surrounding Titan International Inc (NYSE:TWI).
How are hedge funds trading Titan International Inc (NYSE:TWI)?
At the end of the first quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 63% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in TWI a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, MHR Fund Management was the largest shareholder of Titan International Inc (NYSE:TWI), with a stake worth $47.8 million reported as of the end of March. Trailing MHR Fund Management was Renaissance Technologies, which amassed a stake valued at $18.9 million. Rutabaga Capital Management, Point72 Asset Management, and Point72 Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, key hedge funds were leading the bulls’ herd. Rutabaga Capital Management, managed by Peter Schliemann, initiated the biggest position in Titan International Inc (NYSE:TWI). Rutabaga Capital Management had $6 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $3 million position during the quarter. The other funds with brand new TWI positions are Steve Cohen’s Point72 Asset Management, Israel Englander’s Millennium Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Titan International Inc (NYSE:TWI) but similarly valued. We will take a look at Landec Corporation (NASDAQ:LNDC), The Cato Corporation (NYSE:CATO), Kindred Biosciences Inc (NASDAQ:KIN), and Unifi, Inc. (NYSE:UFI). This group of stocks’ market values are closest to TWI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LNDC | 8 | 49195 | 1 |
| CATO | 12 | 35413 | -3 |
| KIN | 10 | 119901 | 4 |
| UFI | 11 | 69368 | 1 |
| Average | 10.25 | 68469 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $82 million in TWI’s case. The Cato Corporation (NYSE:CATO) is the most popular stock in this table. On the other hand Landec Corporation (NASDAQ:LNDC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Titan International Inc (NYSE:TWI) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TWI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TWI were disappointed as the stock returned -23.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
