Is Tailored Brands, Inc. (NYSE:TLRD) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Tailored Brands, Inc. (NYSE:TLRD) shareholders have witnessed a decrease in hedge fund interest lately. Our calculations also showed that TLRD isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most market participants, hedge funds are viewed as unimportant, outdated investment tools of the past. While there are more than 8000 funds with their doors open today, We choose to focus on the upper echelon of this group, approximately 750 funds. It is estimated that this group of investors have their hands on bulk of all hedge funds' total asset base, and by observing their matchless investments, Insider Monkey has found several investment strategies that have historically surpassed the market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_673876" align="aligncenter" width="473"] John Overdeck of Two Sigma Advisors[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let's go over the fresh hedge fund action surrounding Tailored Brands, Inc. (NYSE:TLRD).
How have hedgies been trading Tailored Brands, Inc. (NYSE:TLRD)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TLRD over the last 17 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.
Among these funds, Scion Asset Management held the most valuable stake in Tailored Brands, Inc. (NYSE:TLRD), which was worth $12.7 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $3 million worth of shares. D E Shaw, Weld Capital Management, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Scion Asset Management allocated the biggest weight to Tailored Brands, Inc. (NYSE:TLRD), around 21.22% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, setting aside 0.22 percent of its 13F equity portfolio to TLRD.
Since Tailored Brands, Inc. (NYSE:TLRD) has experienced falling interest from hedge fund managers, it's safe to say that there was a specific group of funds that slashed their full holdings by the end of the third quarter. Intriguingly, Dmitry Balyasny's Balyasny Asset Management sold off the largest stake of the 750 funds tracked by Insider Monkey, comprising close to $9.9 million in stock. Renaissance Technologies, also dumped its stock, about $2.7 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 6 funds by the end of the third quarter.
Let's check out hedge fund activity in other stocks similar to Tailored Brands, Inc. (NYSE:TLRD). These stocks are Vince Holding Corp (NYSE:VNCE), CRH Medical Corporation (NYSE:CRHM), Babcock & Wilcox Enterprises Inc (NYSE:BW), and Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE). All of these stocks' market caps resemble TLRD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VNCE,3,6052,1 CRHM,6,39884,0 BW,8,35123,-4 AGLE,13,89709,-3 Average,7.5,42692,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $21 million in TLRD's case. Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) is the most popular stock in this table. On the other hand Vince Holding Corp (NYSE:VNCE) is the least popular one with only 3 bullish hedge fund positions. Tailored Brands, Inc. (NYSE:TLRD) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on TLRD as the stock returned 20.2% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.