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Hedge Funds Are Betting On Thor Industries, Inc. (THO)

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Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Thor Industries, Inc. (NYSE:THO) changed recently.

Thor Industries, Inc. (NYSE:THO) was in 26 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 42. THO has seen an increase in enthusiasm from smart money in recent months. There were 21 hedge funds in our database with THO holdings at the end of March. Our calculations also showed that THO isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Today there are a multitude of indicators shareholders have at their disposal to evaluate publicly traded companies. Some of the most underrated indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outperform the broader indices by a superb amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Jeffrey Gendell of Tontine Asset 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. Now let's view the fresh hedge fund action surrounding Thor Industries, Inc. (NYSE:THO).

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

At the end of the second quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in THO over the last 24 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is THO A Good Stock To Buy?
Is THO A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Tontine Asset Management, managed by Jeffrey Gendell, holds the largest position in Thor Industries, Inc. (NYSE:THO). Tontine Asset Management has a $46.8 million position in the stock, comprising 4.2% of its 13F portfolio. Coming in second is Scopus Asset Management, led by Alexander Mitchell, holding a $22.6 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Tim Curro's Value Holdings LP, Doug Gordon, Jon Hilsabeck and Don Jabro's Shellback Capital and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Value Holdings LP allocated the biggest weight to Thor Industries, Inc. (NYSE:THO), around 4.97% of its 13F portfolio. Tontine Asset Management is also relatively very bullish on the stock, setting aside 4.15 percent of its 13F equity portfolio to THO.

Consequently, key hedge funds have been driving this bullishness. Tontine Asset Management, managed by Jeffrey Gendell, created the largest position in Thor Industries, Inc. (NYSE:THO). Tontine Asset Management had $46.8 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro's Shellback Capital also made a $15.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Robert Bishop's Impala Asset Management, Robert Vincent McHugh's Jade Capital Advisors, and Israel Englander's Millennium Management.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Thor Industries, Inc. (NYSE:THO) but similarly valued. These stocks are Endava plc (NYSE:DAVA), SYNNEX Corporation (NYSE:SNX), Callaway Golf Company (NYSE:ELY), Lumentum Holdings Inc (NASDAQ:LITE), Huaneng Power International Inc (NYSE:HNP), EQT Corporation (NYSE:EQT), and Colfax Corporation (NYSE:CFX). All of these stocks' market caps resemble THO's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DAVA,16,197353,7 SNX,20,629311,5 ELY,39,559436,-1 LITE,29,334727,-2 HNP,4,4331,0 EQT,43,468450,8 CFX,31,1074229,-18 Average,26,466834,-0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $467 million. That figure was $180 million in THO's case. EQT Corporation (NYSE:EQT) is the most popular stock in this table. On the other hand Huaneng Power International Inc (NYSE:HNP) is the least popular one with only 4 bullish hedge fund positions. Thor Industries, Inc. (NYSE:THO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for THO is 56.8. 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 negative signal and 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 24.9% in 2021 through October 15th and surpassed the market again by 4.5 percentage points. Unfortunately THO wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); THO investors were disappointed as the stock returned -4% since the end of June (through 10/15) 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 most of these stocks already outperformed the market in 2021.

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