The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Tesla Motors Inc (NASDAQ:TSLA) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Hedge fund interest in Tesla Motors Inc (NASDAQ:TSLA) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as CME Group Inc (NASDAQ:CME), Thomson Reuters Corporation (USA) (NYSE:TRI), and Broadcom Corporation (NASDAQ:BRCM) to gather more data points.
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According to most traders, hedge funds are assumed to be slow, old investment tools of the past. While there are greater than 8000 funds with their doors open at the moment, We hone in on the moguls of this club, around 700 funds. Most estimates calculate that this group of people command bulk of the smart money’s total asset base, and by paying attention to their highest performing equity investments, Insider Monkey has uncovered a number of investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Now, let’s take a look at the fresh action surrounding Tesla Motors Inc (NASDAQ:TSLA).
What does the smart money think about Tesla Motors Inc (NASDAQ:TSLA)?
Heading into Q4, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Andor Capital Management, managed by Daniel Benton, holds the largest position in Tesla Motors Inc (NASDAQ:TSLA). Andor Capital Management has a $248.4 million position in the stock, comprising 39% of its 13F portfolio. The second most bullish fund manager is Ken Griffin of Citadel Investment Group, with a $205.5 million call position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Mike Masters’ Masters Capital Management, and D E Shaw.
It’s worth mentioning that Nick Niell’s Arrowgrass Capital Partners said goodbye to the largest stake of the 700 funds monitored by Insider Monkey, comprising about $21.5 million in call options., and Joe DiMenna’s ZWEIG DIMENNA PARTNERS was right behind this move, as the fund sold off about $21.5 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks similar to Tesla Motors Inc (NASDAQ:TSLA). These stocks are CME Group Inc (NASDAQ:CME), Thomson Reuters Corporation (USA) (NYSE:TRI), Broadcom Corporation (NASDAQ:BRCM), and Travelers Companies Inc (NYSE:TRV). This group of stocks’ market values match TSLA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CME | 42 | 973079 | -3 |
| TRI | 12 | 241724 | -5 |
| BRCM | 67 | 6729781 | -12 |
| TRV | 32 | 742795 | -11 |
As you can see these stocks had an average of 38.25 hedge funds with bullish positions and the average amount invested in these stocks was $2,172 million. That figure was $1,012 million in TSLA’s case. Broadcom Corporation (NASDAQ:BRCM) is the most popular stock in this table. On the other hand Thomson Reuters Corporation (USA) (NYSE:TRI) is the least popular one with only 12 bullish hedge fund positions. Tesla Motors Inc (NASDAQ:TSLA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BRCM might be a better candidate to consider a long position.
