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Hedge Funds Aren’t Crazy About Terex Corporation (TEX) Anymore

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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. Insider Monkey finished processing 867 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2021. What do these smart investors think about Terex Corporation (NYSE:TEX)?

Terex Corporation (NYSE:TEX) shareholders have witnessed a decrease in activity from the world's largest hedge funds lately. Terex Corporation (NYSE:TEX) was in 25 hedge funds' portfolios at the end of September. The all time high for this statistic is 38. There were 27 hedge funds in our database with TEX holdings at the end of June. Our calculations also showed that TEX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let's take a peek at the new hedge fund action surrounding Terex Corporation (NYSE:TEX).


Ken Fisher of Fisher Asset Management

Do Hedge Funds Think TEX Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. By comparison, 18 hedge funds held shares or bullish call options in TEX a year ago. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

More specifically, Pzena Investment Management was the largest shareholder of Terex Corporation (NYSE:TEX), with a stake worth $136.9 million reported as of the end of September. Trailing Pzena Investment Management was Fisher Asset Management, which amassed a stake valued at $96.3 million. Citadel Investment Group, AQR Capital Management, and Millennium Management 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 Pzena Investment Management allocated the biggest weight to Terex Corporation (NYSE:TEX), around 0.54% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.5 percent of its 13F equity portfolio to TEX.

Due to the fact that Terex Corporation (NYSE:TEX) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there was a specific group of money managers that slashed their full holdings last quarter. Interestingly, Richard Driehaus's Driehaus Capital sold off the biggest stake of the 750 funds followed by Insider Monkey, worth close to $39.9 million in stock. Joe DiMenna's fund, ZWEIG DIMENNA PARTNERS, also said goodbye to its stock, about $10.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds last quarter.

Let's now review hedge fund activity in other stocks similar to Terex Corporation (NYSE:TEX). We will take a look at Ultrapar Participacoes SA (NYSE:UGP), Patterson Companies, Inc. (NASDAQ:PDCO), Verint Systems Inc. (NASDAQ:VRNT), Relay Therapeutics, Inc. (NASDAQ:RLAY), Urban Outfitters, Inc. (NASDAQ:URBN), John Wiley & Sons Inc (NYSE:JW), and J&J Snack Foods Corp. (NASDAQ:JJSF). This group of stocks' market caps match TEX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UGP,5,8393,-5 PDCO,21,151269,-2 VRNT,25,708338,-5 RLAY,18,443758,1 URBN,23,275737,-5 JW,14,118076,-2 JJSF,19,62147,4 Average,17.9,252531,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.9 hedge funds with bullish positions and the average amount invested in these stocks was $253 million. That figure was $359 million in TEX's case. Verint Systems Inc. (NASDAQ:VRNT) is the most popular stock in this table. On the other hand Ultrapar Participacoes SA (NYSE:UGP) is the least popular one with only 5 bullish hedge fund positions. Terex Corporation (NYSE:TEX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TEX is 72.7. 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. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on TEX as the stock returned 8.8% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.