The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded TPG RE Finance Trust, Inc. (NYSE:TRTX) based on those filings.
TPG RE Finance Trust, Inc. (NYSE:TRTX) investors should pay attention to an increase in activity from the world's largest hedge funds in recent months. TRTX was in 17 hedge funds' portfolios at the end of March. There were 15 hedge funds in our database with TRTX positions at the end of the previous quarter. Our calculations also showed that TRTX 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_365194" align="aligncenter" width="396"] David E. Shaw of D.E. Shaw[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. Keeping this in mind we're going to take a look at the fresh hedge fund action surrounding TPG RE Finance Trust, Inc. (NYSE:TRTX).
How have hedgies been trading TPG RE Finance Trust, Inc. (NYSE:TRTX)?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the fourth quarter of 2019. By comparison, 11 hedge funds held shares or bullish call options in TRTX a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the biggest position in TPG RE Finance Trust, Inc. (NYSE:TRTX). Renaissance Technologies has a $8.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is D E Shaw, led by D. E. Shaw, holding a $4.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers with similar optimism encompass Dmitry Balyasny's Balyasny Asset Management, Israel Englander's Millennium Management and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Indaba Capital Management allocated the biggest weight to TPG RE Finance Trust, Inc. (NYSE:TRTX), around 0.68% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, earmarking 0.2 percent of its 13F equity portfolio to TRTX.
As industrywide interest jumped, key money managers were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the largest position in TPG RE Finance Trust, Inc. (NYSE:TRTX). Balyasny Asset Management had $3.9 million invested in the company at the end of the quarter. Derek C. Schrier's Indaba Capital Management also initiated a $1.3 million position during the quarter. The following funds were also among the new TRTX investors: Greg Eisner's Engineers Gate Manager, Tom Wagner and Ara Cohen's Knighthead Capital, and Bruce Kovner's Caxton Associates LP.
Let's now review hedge fund activity in other stocks similar to TPG RE Finance Trust, Inc. (NYSE:TRTX). We will take a look at Amyris Inc (NASDAQ:AMRS), Arrow Financial Corporation (NASDAQ:AROW), Huize Holding Limited (NASDAQ:HUIZ), and Verastem Inc (NASDAQ:VSTM). This group of stocks' market valuations are similar to TRTX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMRS,10,30419,0 AROW,4,13074,-1 HUIZ,1,262,1 VSTM,17,173703,9 Average,8,54365,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $29 million in TRTX's case. Verastem Inc (NASDAQ:VSTM) is the most popular stock in this table. On the other hand Huize Holding Limited (NASDAQ:HUIZ) is the least popular one with only 1 bullish hedge fund positions. TPG RE Finance Trust, Inc. (NYSE:TRTX) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on TRTX as the stock returned 64% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.