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Here’s What Hedge Funds Think About Tutor Perini Corp (TPC)

Reymerlyn Martin

Reputable billionaire investors such as Jim Simons, Cliff Asness and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won't accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Tutor Perini Corp (NYSE:TPC) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds' portfolios at the end of the fourth quarter of 2018. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Career Education Corp. (NASDAQ:CECO), Kelly Services, Inc. (NASDAQ:KELYA), and Associated Capital Group, Inc. (NYSE:AC) to gather more data points.

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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 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.

HIGHBRIDGE CAPITAL MANAGEMENT

We're going to take a look at the fresh hedge fund action regarding Tutor Perini Corp (NYSE:TPC).

What have hedge funds been doing with Tutor Perini Corp (NYSE:TPC)?

At the end of the fourth quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TPC over the last 14 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

TPC_may2019

Among these funds, Millennium Management held the most valuable stake in Tutor Perini Corp (NYSE:TPC), which was worth $2.5 million at the end of the fourth quarter. On the second spot was Two Sigma Advisors which amassed $1.6 million worth of shares. Moreover, Weld Capital Management, Tudor Investment Corp, and Highbridge Capital Management were also bullish on Tutor Perini Corp (NYSE:TPC), allocating a large percentage of their portfolios to this stock.

Due to the fact that Tutor Perini Corp (NYSE:TPC) has witnessed declining sentiment from hedge fund managers, it's safe to say that there is a sect of hedgies who sold off their full holdings heading into Q3. Interestingly, Dmitry Balyasny's Balyasny Asset Management said goodbye to the biggest position of the 700 funds monitored by Insider Monkey, comprising close to $0.5 million in stock, and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital was right behind this move, as the fund cut about $0 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Tutor Perini Corp (NYSE:TPC) but similarly valued. These stocks are Career Education Corp. (NASDAQ:CECO), Kelly Services, Inc. (NASDAQ:KELYA), Associated Capital Group, Inc. (NYSE:AC), and PC Connection, Inc. (NASDAQ:CNXN). This group of stocks' market valuations resemble TPC's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CECO,22,125143,5 KELYA,10,12918,3 AC,4,61237,0 CNXN,6,39609,-2 Average,10.5,59727,1.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $7 million in TPC's case. Career Education Corp. (NASDAQ:CECO) is the most popular stock in this table. On the other hand Associated Capital Group, Inc. (NYSE:AC) is the least popular one with only 4 bullish hedge fund positions. Tutor Perini Corp (NYSE:TPC) is not the least popular stock in this group but hedge fund interest is still below average. 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 TPC, though not to the same extent, as the stock returned 24.1% and outperformed the market as well.

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

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