What Do Hedge Funds Think of Trinity Industries, Inc. (TRN)?

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Trinity Industries, Inc. (NYSE:TRN) was in 23 hedge funds’ portfolios at the end of September. TRN shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. There were 26 hedge funds in our database with TRN holdings at the end of the previous quarter. 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 Intrexon Corp (NYSE:XON), NuStar Energy L.P. (NYSE:NS), and Thoratec Corporation (NASDAQ:THOR) to gather more data points.

In today’s marketplace there are numerous metrics market participants can use to value publicly traded companies. Two of the less utilized metrics are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the top fund managers can beat the market by a very impressive margin (see the details here).

With all of this in mind, let’s analyze the recent action regarding Trinity Industries, Inc. (NYSE:TRN).

How are hedge funds trading Trinity Industries, Inc. (NYSE:TRN)?

Heading into Q4, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -12% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the number one position in Trinity Industries, Inc. (NYSE:TRN). Citadel Investment Group has a $44.6 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second most bullish fund manager is Zac Hirzel of Hirzel Capital Management, with a $21.5 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions include D E Shaw, Glenn Russell Dubin’s Highbridge Capital Management and Brett Hendrickson’s Nokomis Capital.

Judging by the fact that Trinity Industries, Inc. (NYSE:TRN) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of funds that elected to cut their entire stakes last quarter. Intriguingly, Curtis Macnguyen’s Ivory Capital (Investment Mgmt) dropped the largest position of the 700 funds monitored by Insider Monkey, valued at close to $10.3 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $8.7 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Trinity Industries, Inc. (NYSE:TRN) but similarly valued. We will take a look at Intrexon Corp (NYSE:XON), NuStar Energy L.P. (NYSE:NS), Thoratec Corporation (NASDAQ:THOR), and Allied World Assurance Co Holdings, AG. (NYSE:AWH). This group of stocks’ market valuations are closest to TRN’s market valuation.

As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $273 million. That figure was $210 million in TRN’s case. Thoratec Corporation (NASDAQ:THOR) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 11 bullish hedge fund positions. Trinity Industries, Inc. (NYSE:TRN) 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 THOR might be a better candidate to consider a long position.