A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on The Toro Company (NYSE:TTC).
The Toro Company (NYSE:TTC) was in 32 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 32. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. TTC shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 31 hedge funds in our database with TTC holdings at the end of December. Our calculations also showed that TTC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Minhua Zhang of Weld Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the key hedge fund action regarding The Toro Company (NYSE:TTC).
Do Hedge Funds Think TTC Is A Good Stock To Buy Now?
At first quarter’s end, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. By comparison, 24 hedge funds held shares or bullish call options in TTC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Select Equity Group was the largest shareholder of The Toro Company (NYSE:TTC), with a stake worth $557 million reported as of the end of March. Trailing Select Equity Group was Impax Asset Management, which amassed a stake valued at $169 million. Fisher Asset Management, Chilton Investment Company, and Renaissance Technologies 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 Bishop Rock Capital allocated the biggest weight to The Toro Company (NYSE:TTC), around 3.92% of its 13F portfolio. Select Equity Group is also relatively very bullish on the stock, dishing out 2.02 percent of its 13F equity portfolio to TTC.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the most valuable position in The Toro Company (NYSE:TTC). Tudor Investment Corp had $2.4 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also made a $2.2 million investment in the stock during the quarter. The other funds with brand new TTC positions are Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) and Bruce Kovner’s Caxton Associates LP.
Let’s check out hedge fund activity in other stocks similar to The Toro Company (NYSE:TTC). These stocks are Booz Allen Hamilton Holding Corporation (NYSE:BAH), BorgWarner Inc. (NYSE:BWA), Zynga Inc (NASDAQ:ZNGA), Dropbox, Inc. (NASDAQ:DBX), Cable One Inc (NYSE:CABO), Camden Property Trust (NYSE:CPT), and Essential Utilities Inc (NYSE:WTRG). This group of stocks’ market valuations are similar to TTC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BAH | 29 | 178958 | 2 |
| BWA | 27 | 590548 | 0 |
| ZNGA | 47 | 1143096 | -5 |
| DBX | 31 | 775813 | -12 |
| CABO | 23 | 694559 | 6 |
| CPT | 24 | 614554 | -2 |
| WTRG | 19 | 266338 | 6 |
| Average | 28.6 | 609124 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $609 million. That figure was $1017 million in TTC’s case. Zynga Inc (NASDAQ:ZNGA) is the most popular stock in this table. On the other hand Essential Utilities Inc (NYSE:WTRG) is the least popular one with only 19 bullish hedge fund positions. The Toro Company (NYSE:TTC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TTC is 59.2. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately TTC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TTC were disappointed as the stock returned 8.4% since the end of March (through 7/2) 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 many of these stocks already outperformed the market since 2019.
Follow Toro Co (NYSE:TTC)
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Disclosure: None. This article was originally published at Insider Monkey.
