Terex Corporation (NYSE:TEX)’s stock plunged more than 16% today after Zoomlion, a Chinese Heavy Industry Science and Technology company, dropped its $3.4 billion offer to acquire the Connecticut-based company. In August, Finland-based company Konecranes Plc announced intention to acquire Terex Corporation, but its offer was dwarfed Zoomlion’s. Therefore, Terex Corporation (NYSE:TEX) decided to sell only its Material Handling and Port Solutions business to Konecranes for $1.3 billion and the deal will proceed as planned. Terex Corporation’s board chairman David A. Sachs said that Zoomlion was unable to provide any binding and fully financed proposal for the purchase of the company and added that the board has confidence in Terex’s global management regarding future prospects of the company. Sachs also said that the deal with Konecranes for MHPS business will provide excellent value to customers and team members, and Terex’s debt levels will be decreased after the transaction.
Today’s decline is disappointing for hedge funds that have been bullish on Terex Corporation lately. The stock has experienced an increase in support from the world’s elite money managers of late and it was in 38 hedge funds’ portfolios at the end of the first quarter of 2016, compared to 19 hedge funds in our database with TEX holdings at the end of the previous quarter. However, 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 DuPont Fabros Technology, Inc. (NYSE:DFT), Qlik Technologies Inc (NASDAQ:QLIK), and Tech Data Corp (NASDAQ:TECD) to gather more data points.
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In the eyes of most traders, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are over 8000 funds in operation at the moment, We look at the elite of this club, around 700 funds. These money managers shepherd bulk of all hedge funds’ total capital, and by watching their first-class picks, Insider Monkey has brought to light many investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to take a peek at the key action encompassing Terex Corporation (NYSE:TEX).
When looking at the institutional investors followed by Insider Monkey, Richard S. Pzena’s Pzena Investment Management has the biggest position in Terex Corporation (NYSE:TEX), worth close to $119.5 million, corresponding to 0.7% of its total 13F portfolio. The second most bullish fund manager is Point72 Asset Management, led by Steve Cohen, holding a $50.6 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish consist of Daniel S. Och’s OZ Management, Carl Tiedemann and Michael Tiedemann’s TIG Advisors and Isaac Corre’s Governors Lane.
Since Terex Coporation registered an increase in the number of funds with long positions, on the next page we are going to take a look at some investors that added the stock to their equity portfolios.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. OZ Management established the largest position in Terex Corporation (NYSE:TEX). OZ Management had $42.2 million invested in the company at the end of the quarter. TIG Advisors also made a $42 million investment in the stock during the quarter. The other funds with brand new TEX positions are Isaac Corre’s Governors Lane, Joel Greenblatt’s Gotham Asset Management, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now review hedge fund activity in other stocks similar to Terex Corporation (NYSE:TEX). We will take a look at DuPont Fabros Technology, Inc. (NYSE:DFT), Qlik Technologies Inc (NASDAQ:QLIK), Tech Data Corp (NASDAQ:TECD), and Akorn, Inc. (NASDAQ:AKRX). This group of stocks’ market caps are similar to TEX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DFT | 16 | 324464 | 3 |
| QLIK | 31 | 659625 | -5 |
| TECD | 15 | 184711 | -3 |
| AKRX | 26 | 659321 | -8 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $457 million. That figure was $489 million in TEX’s case. Qlik Technologies Inc (NASDAQ:QLIK) is the most popular stock in this table. On the other hand Tech Data Corp (NASDAQ:TECD) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Terex Corporation (NYSE:TEX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
