You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros and Seth Klarman hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Trustmark Corp (NASDAQ:TRMK) has experienced a decrease in activity from the world's largest hedge funds lately. Our calculations also showed that trmk isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to analyze the recent hedge fund action surrounding Trustmark Corp (NASDAQ:TRMK).
What does the smart money think about Trustmark Corp (NASDAQ:TRMK)?
At Q4's end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the second quarter of 2018. By comparison, 8 hedge funds held shares or bullish call options in TRMK a year ago. So, let's find out 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 Trustmark Corp (NASDAQ:TRMK), with a stake worth $7.1 million reported as of the end of September. Trailing Renaissance Technologies was Two Sigma Advisors, which amassed a stake valued at $2.1 million. AQR Capital Management, GLG Partners, and GAMCO Investors were also very fond of the stock, giving the stock large weights in their portfolios.
Because Trustmark Corp (NASDAQ:TRMK) has experienced falling interest from the aggregate hedge fund industry, it's easy to see that there were a few money managers that decided to sell off their positions entirely in the third quarter. Intriguingly, Israel Englander's Millennium Management dumped the biggest position of all the hedgies watched by Insider Monkey, totaling about $13.1 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund cut about $6.5 million worth. These moves are important to note, as aggregate hedge fund interest fell by 1 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Trustmark Corp (NASDAQ:TRMK). We will take a look at B&G Foods, Inc. (NYSE:BGS), Banner Corporation (NASDAQ:BANR), Urban Edge Properties (NYSE:UE), and Tanger Factory Outlet Centers Inc. (NYSE:SKT). This group of stocks' market valuations are similar to TRMK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BGS,10,127033,-3 BANR,18,85482,-2 UE,12,75333,0 SKT,14,77195,3 Average,13.5,91261,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $13 million in TRMK's case. Banner Corporation (NASDAQ:BANR) is the most popular stock in this table. On the other hand B&G Foods, Inc. (NYSE:BGS) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Trustmark Corp (NASDAQ:TRMK) is even less popular than BGS. 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. A small number of hedge funds were also right about betting on TRMK, though not to the same extent, as the stock returned 19.5% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.