There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don't cover. Because of Carl Icahn and other elite funds' exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Tailored Brands, Inc. (NYSE:TLRD).
Is Tailored Brands, Inc. (NYSE:TLRD) going to take off soon? Prominent investors are selling. The number of long hedge fund positions were cut by 5 lately. Our calculations also showed that TLRD isn't among the 30 most popular stocks among hedge funds. TLRD was in 18 hedge funds' portfolios at the end of December. There were 23 hedge funds in our database with TLRD holdings at the end of the previous quarter.
If you'd ask most investors, hedge funds are seen as unimportant, outdated investment tools of the past. While there are more than 8000 funds in operation at present, We hone in on the upper echelon of this club, approximately 750 funds. These hedge fund managers orchestrate bulk of all hedge funds' total capital, and by shadowing their matchless equity investments, Insider Monkey has identified many investment strategies that have historically outstripped the market. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by nearly 5 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
Let's view the latest hedge fund action encompassing Tailored Brands, Inc. (NYSE:TLRD).
How are hedge funds trading Tailored Brands, Inc. (NYSE:TLRD)?
Heading into the first quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TLRD over the last 14 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Tailored Brands, Inc. (NYSE:TLRD) was held by SG Capital Management, which reported holding $13 million worth of stock at the end of December. It was followed by Scion Asset Management with a $8.7 million position. Other investors bullish on the company included Moon Capital, Renaissance Technologies, and Interval Partners.
Seeing as Tailored Brands, Inc. (NYSE:TLRD) has witnessed declining sentiment from the entirety of the hedge funds we track, it's easy to see that there was a specific group of hedge funds that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Steven Boyd's Armistice Capital cut the largest investment of all the hedgies followed by Insider Monkey, valued at an estimated $7.6 million in stock, and David Keidan's Buckingham Capital Management was right behind this move, as the fund said goodbye to about $4.5 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 5 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Tailored Brands, Inc. (NYSE:TLRD). These stocks are GeoVax Labs, Inc. (NYSE:GOV), Monarch Casino & Resort, Inc. (NASDAQ:MCRI), Cellcom Israel Ltd. (NYSE:CEL), and Mercer International Inc. (NASDAQ:MERC). This group of stocks' market values match TLRD's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GOV,13,26690,-2 MCRI,10,114599,0 CEL,2,22038,1 MERC,16,141321,-3 Average,10.25,76162,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $66 million in TLRD's case. Mercer International Inc. (NASDAQ:MERC) is the most popular stock in this table. On the other hand Cellcom Israel Ltd. (NYSE:CEL) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Tailored Brands, Inc. (NYSE:TLRD) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately TLRD wasn't nearly as popular as these 15 stock and hedge funds that were betting on TLRD were disappointed as the stock returned -43% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.