At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of December 31. In this article, we will use that wealth of knowledge to determine whether or not TrustCo Bank Corp NY (NASDAQ:TRST) makes for a good investment right now.
TrustCo Bank Corp NY (NASDAQ:TRST) has experienced an increase in enthusiasm from smart money in recent months. Our calculations also showed that TRST isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's check out the key hedge fund action encompassing TrustCo Bank Corp NY (NASDAQ:TRST).
What does the smart money think about TrustCo Bank Corp NY (NASDAQ:TRST)?
At Q4's end, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in TRST a year ago. 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 TrustCo Bank Corp NY (NASDAQ:TRST) was held by Royce & Associates, which reported holding $21.8 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $11.1 million position. Other investors bullish on the company included Millennium Management, AQR Capital Management, and Two Sigma Advisors.
Consequently, specific money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most outsized position in TrustCo Bank Corp NY (NASDAQ:TRST). Arrowstreet Capital had $0.2 million invested in the company at the end of the quarter.
Let's also examine hedge fund activity in other stocks similar to TrustCo Bank Corp NY (NASDAQ:TRST). These stocks are Nanometrics Incorporated (NASDAQ:NANO), PetIQ, Inc. (NASDAQ:PETQ), Thermon Group Holdings, Inc. (NYSE:THR), and TransMontaigne Partners L.P. (NYSE:TLP). This group of stocks' market valuations resemble TRST's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NANO,19,99817,2 PETQ,13,54011,-9 THR,7,28568,-3 TLP,4,26709,3 Average,10.75,52276,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $43 million in TRST's case. Nanometrics Incorporated (NASDAQ:NANO) is the most popular stock in this table. On the other hand TransMontaigne Partners L.P. (NYSE:TLP) is the least popular one with only 4 bullish hedge fund positions. TrustCo Bank Corp NY (NASDAQ:TRST) 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 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 TRST wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); TRST investors were disappointed as the stock returned 15.5% 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.