What Hedge Funds Think About Terraping 3 Acquisition Corp (TRTL)?

Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Terraping 3 Acquisition Corp (NASDAQ:TRTL) from the perspective of those elite funds.

Terraping 3 Acquisition Corp (NASDAQ:TRTL) investors should be aware of a slight increase in hedge fund interest recently. TRTL was in 14 hedge funds’ portfolios at the end of the third quarter of 2015. There were 13 hedge funds in our database with TRTL 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 Rayonier Advanced Materials Inc (NYSE:RYAM), Amarin Corporation plc (ADR) (NASDAQ:AMRN), and Curis, Inc. (NASDAQ:CRIS) to gather more data points.

In today’s marketplace there are a lot of gauges market participants have at their disposal to evaluate publicly traded companies. A pair of the less utilized gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the broader indices by a solid margin (see the details here).

Now, let’s review the key action surrounding Terraping 3 Acquisition Corp (NASDAQ:TRTL).

How have hedgies been trading Terraping 3 Acquisition Corp (NASDAQ:TRTL)?

Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fir Tree, managed by Jeffrey Tannenbaum, holds the most valuable position in Terraping 3 Acquisition Corp (NASDAQ:TRTL). Fir Tree has a $18.1 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund is Blue Mountain Capital, run by Andrew Feldstein and Stephen Siderow, which holds a $15.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism include Sander Gerber’s Hudson Bay Capital Management, Nick Niell’s Arrowgrass Capital Partners and Paul Glazer’s Glazer Capital.

Consequently, Ionic Capital Management, managed by Bart Baum, initiated a position in Terraping 3 Acquisition Corp (NASDAQ:TRTL) that was worth $0.1 million at the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Terraping 3 Acquisition Corp (NASDAQ:TRTL). These stocks are Rayonier Advanced Materials Inc (NYSE:RYAM), Amarin Corporation plc (ADR) (NASDAQ:AMRN), Curis, Inc. (NASDAQ:CRIS), and CNB Financial Corporation Inc (NASDAQ:CCNE). This group of stocks’ market caps are similar to TRTL’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. Rayonier Advanced Materials Inc (NYSE:RYAM) is the most popular stock in this table with 20 long positions, while CNB Financial Corporation Inc (NASDAQ:CCNE) is the least popular one with only four funds reporting stakes. Terraping 3 Acquisition Corp (NASDAQ:TRTL) is not the most popular stock in this group, but hedge fund interest is still above average. Moreover,  the funds we track held $97 million worth of TRTL’s stock. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are collectively most bullish on, such as RYAM, in this particular case.