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Hedge Funds Have Never Been This Bullish On Teledyne Technologies Incorporated (TDY)

Nina Todic

It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 18.7% so far in 2019 and outperformed the S&P 500 ETF by 6.6 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards Teledyne Technologies Incorporated (NYSE:TDY) changed during the first quarter.

Is Teledyne Technologies Incorporated (NYSE:TDY) an exceptional investment right now? Investors who are in the know are taking a bullish view. The number of bullish hedge fund positions increased by 8 recently. Our calculations also showed that tdy isn't among the 30 most popular stocks among hedge funds.

If you'd ask most stock holders, hedge funds are seen as underperforming, old investment tools of years past. While there are over 8000 funds in operation at the moment, Our experts hone in on the upper echelon of this club, about 750 funds. Most estimates calculate that this group of people manage the lion's share of the hedge fund industry's total asset base, and by following their inimitable investments, Insider Monkey has found many investment strategies that have historically outrun the market. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.

Ken Fisher FISHER ASSET MANAGEMENT

Let's take a look at the new hedge fund action surrounding Teledyne Technologies Incorporated (NYSE:TDY).

How are hedge funds trading Teledyne Technologies Incorporated (NYSE:TDY)?

At the end of the first quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards TDY over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

No of Hedge Funds with TDY Positions

More specifically, AQR Capital Management was the largest shareholder of Teledyne Technologies Incorporated (NYSE:TDY), with a stake worth $158.8 million reported as of the end of March. Trailing AQR Capital Management was Cardinal Capital, which amassed a stake valued at $89.6 million. Fisher Asset Management, Select Equity Group, and Scopus Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.

As one would reasonably expect, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, assembled the biggest position in Teledyne Technologies Incorporated (NYSE:TDY). Citadel Investment Group had $19.7 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider's SG Capital Management also initiated a $19.4 million position during the quarter. The other funds with new positions in the stock are Michael Platt and William Reeves's BlueCrest Capital Mgmt., Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners, and Noam Gottesman's GLG Partners.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Teledyne Technologies Incorporated (NYSE:TDY) but similarly valued. We will take a look at Pearson PLC (NYSE:PSO), Allegion plc (NYSE:ALLE), Tata Motors Limited (NYSE:TTM), and Sarepta Therapeutics Inc (NASDAQ:SRPT). This group of stocks' market valuations resemble TDY's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PSO,4,13571,-1 ALLE,21,496364,-4 TTM,12,115269,3 SRPT,44,1207021,3 Average,20.25,458056,0.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $458 million. That figure was $597 million in TDY's case. Sarepta Therapeutics Inc (NASDAQ:SRPT) is the most popular stock in this table. On the other hand Pearson PLC (NYSE:PSO) is the least popular one with only 4 bullish hedge fund positions. Teledyne Technologies Incorporated (NYSE:TDY) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on TDY, though not to the same extent, as the stock returned 0% during the same time frame and outperformed the market as well.

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

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