U.S. Markets open in 4 hrs 10 mins

Here’s What Hedge Funds Think About TOTAL S.A. (TOT)

Asma UL Husna

How do we determine whether TOTAL S.A. (NYSE:TOT) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.

TOTAL S.A. (NYSE:TOT) investors should be aware of an increase in support from the world's most elite money managers lately. TOT was in 13 hedge funds' portfolios at the end of the first quarter of 2019. There were 9 hedge funds in our database with TOT holdings at the end of the previous quarter. Our calculations also showed that TOT isn't among the 30 most popular stocks among hedge funds.

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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Clint Carlson, Carlson Capital

Let's view the latest hedge fund action surrounding TOTAL S.A. (NYSE:TOT).

What does smart money think about TOTAL S.A. (NYSE:TOT)?

At Q1's end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 44% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TOT over the last 15 quarters. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

TOT_june2019

The largest stake in TOTAL S.A. (NYSE:TOT) was held by Fisher Asset Management, which reported holding $881.4 million worth of stock at the end of March. It was followed by Point72 Asset Management with a $47.9 million position. Other investors bullish on the company included Balyasny Asset Management, HBK Investments, and Adage Capital Management.

Consequently, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in TOTAL S.A. (NYSE:TOT). Balyasny Asset Management had $26.1 million invested in the company at the end of the quarter. Clint Carlson's Carlson Capital also initiated a $4 million position during the quarter. The other funds with new positions in the stock are Michael Gelband's ExodusPoint Capital, Jeffrey Talpins's Element Capital Management, and Michael Platt and William Reeves's BlueCrest Capital Mgmt..

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as TOTAL S.A. (NYSE:TOT) but similarly valued. These stocks are Abbott Laboratories (NYSE:ABT), BHP Group (NYSE:BHP), SAP SE (NYSE:SAP), and Philip Morris International Inc. (NYSE:PM). This group of stocks' market values are closest to TOT's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABT,50,1859812,-1 BHP,15,637521,0 SAP,8,1173668,-6 PM,43,3989796,-5 Average,29,1915199,-3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $1915 million. That figure was $972 million in TOT's case. Abbott Laboratories (NYSE:ABT) is the most popular stock in this table. On the other hand SAP SE (NYSE:SAP) is the least popular one with only 8 bullish hedge fund positions. TOTAL S.A. (NYSE:TOT) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TOT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TOT investors were disappointed as the stock returned -1.5% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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

Related Content