Here is What Hedge Funds Think About Tompkins Financial Corporation (TMP)
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Tompkins Financial Corporation (NYSE:TMP).
Is Tompkins Financial Corporation (NYSE:TMP) a worthy stock to buy now? Investors who are in the know were getting less bullish. The number of bullish hedge fund bets were cut by 1 recently. Tompkins Financial Corporation (NYSE:TMP) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. Our calculations also showed that TMP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we're going to check out the recent hedge fund action surrounding Tompkins Financial Corporation (NYSE:TMP).
Do Hedge Funds Think TMP Is A Good Stock To Buy Now?
At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in TMP a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Tompkins Financial Corporation (NYSE:TMP), with a stake worth $3 million reported as of the end of March. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $1.5 million. PEAK6 Capital Management, Tudor Investment Corp, and D E Shaw 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 Tudor Investment Corp allocated the biggest weight to Tompkins Financial Corporation (NYSE:TMP), around 0.01% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, setting aside 0.004 percent of its 13F equity portfolio to TMP.
Due to the fact that Tompkins Financial Corporation (NYSE:TMP) has experienced a decline in interest from the smart money, we can see that there lies a certain "tier" of hedge funds who sold off their entire stakes by the end of the first quarter. Intriguingly, Paul Marshall and Ian Wace's Marshall Wace LLP said goodbye to the biggest investment of the "upper crust" of funds watched by Insider Monkey, valued at an estimated $0.8 million in stock, and David Harding's Winton Capital Management was right behind this move, as the fund cut about $0.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds by the end of the first quarter.
Let's now review hedge fund activity in other stocks similar to Tompkins Financial Corporation (NYSE:TMP). These stocks are US Concrete Inc (NASDAQ:USCR), Everi Holdings Inc (NYSE:EVRI), Northwest Biotherapeutics, Inc (NASDAQ:NWBO), German American Bancorp., Inc. (NASDAQ:GABC), Employers Holdings, Inc. (NYSE:EIG), Shattuck Labs, Inc. (NASDAQ:STTK), and Cambium Networks Corporation (NASDAQ:CMBM). This group of stocks' market values match TMP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position USCR,6,45936,-2 EVRI,24,217375,-5 NWBO,1,1,1 GABC,3,21395,0 EIG,11,59482,-2 STTK,8,267436,-6 CMBM,10,85021,-5 Average,9,99521,-2.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $6 million in TMP's case. Everi Holdings Inc (NYSE:EVRI) is the most popular stock in this table. On the other hand Northwest Biotherapeutics, Inc (NASDAQ:NWBO) is the least popular one with only 1 bullish hedge fund positions. Tompkins Financial Corporation (NYSE:TMP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TMP is 34.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately TMP wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); TMP investors were disappointed as the stock returned -4.6% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
