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In this article we will take a look at whether hedge funds think Tompkins Financial Corporation (NYSE:TMP) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Tompkins Financial Corporation (NYSE:TMP) investors should pay attention to a decrease in hedge fund interest in recent months. Our calculations also showed that TMP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are viewed as slow, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at the moment, We hone in on the moguls of this group, around 850 funds. These money managers have their hands on the lion's share of the smart money's total capital, and by shadowing their first-class equity investments, Insider Monkey has deciphered a number of investment strategies that have historically outrun the broader indices. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
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David Harding of Winton Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a peek at the new hedge fund action encompassing Tompkins Financial Corporation (NYSE:TMP).
What does smart money think about Tompkins Financial Corporation (NYSE:TMP)?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TMP over the last 18 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the most valuable position in Tompkins Financial Corporation (NYSE:TMP), worth close to $12.7 million, amounting to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Winton Capital Management, led by David Harding, holding a $0.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Ken Griffin's Citadel Investment Group, D. E. Shaw's D E Shaw and . In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Tompkins Financial Corporation (NYSE:TMP), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to TMP.
Due to the fact that Tompkins Financial Corporation (NYSE:TMP) has faced declining sentiment from the smart money, logic holds that there is a sect of fund managers who were dropping their entire stakes in the third quarter. Interestingly, Israel Englander's Millennium Management cut the biggest investment of all the hedgies followed by Insider Monkey, totaling an estimated $0.8 million in stock, and Donald Sussman's Paloma Partners was right behind this move, as the fund dumped about $0.2 million worth. These moves are important to note, as aggregate hedge fund interest fell by 2 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Tompkins Financial Corporation (NYSE:TMP) but similarly valued. These stocks are PC Connection, Inc. (NASDAQ:CNXN), TG Therapeutics Inc (NASDAQ:TGTX), Plug Power, Inc. (NASDAQ:PLUG), and Healthy Harmony Holdings, L.P. (NYSE:NFH). This group of stocks' market caps match TMP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNXN,10,43318,-5 TGTX,26,260243,4 PLUG,15,92142,2 NFH,16,172547,4 Average,16.75,142063,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $14 million in TMP's case. TG Therapeutics Inc (NASDAQ:TGTX) is the most popular stock in this table. On the other hand PC Connection, Inc. (NASDAQ:CNXN) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Tompkins Financial Corporation (NYSE:TMP) is even less popular than CNXN. Hedge funds dodged a bullet by taking a bearish stance towards TMP. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately TMP wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); TMP investors were disappointed as the stock returned -9.6% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.