Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the nearly unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) investors should pay attention to a decrease in support from the world's most elite money managers in recent months. Our calculations also showed that TLK isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most market participants, hedge funds are seen as slow, outdated financial vehicles of years past. While there are over 8000 funds trading at present, We look at the moguls of this group, around 750 funds. Most estimates calculate that this group of people control bulk of all hedge funds' total capital, and by paying attention to their unrivaled equity investments, Insider Monkey has discovered several investment strategies that have historically defeated the broader indices. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a peek at the latest hedge fund action regarding Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK).
What have hedge funds been doing with Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK)?
At the end of the second quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -22% from the previous quarter. On the other hand, there were a total of 5 hedge funds with a bullish position in TLK 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.
Among these funds, Renaissance Technologies held the most valuable stake in Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), which was worth $129.4 million at the end of the second quarter. On the second spot was Arrowstreet Capital which amassed $13.4 million worth of shares. Moreover, LMR Partners, Sensato Capital Management, and Fisher Asset Management were also bullish on Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), allocating a large percentage of their portfolios to this stock.
Since Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) has faced falling interest from the aggregate hedge fund industry, logic holds that there lies a certain "tier" of hedge funds that elected to cut their positions entirely in the second quarter. It's worth mentioning that Israel Englander's Millennium Management cut the largest stake of all the hedgies followed by Insider Monkey, totaling an estimated $3.5 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund sold off about $1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 2 funds in the second quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) but similarly valued. We will take a look at Xilinx, Inc. (NASDAQ:XLNX), Southern Copper Corporation (NYSE:SCCO), Amphenol Corporation (NYSE:APH), and Hilton Worldwide Holdings Inc (NYSE:HLT). This group of stocks' market valuations match TLK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XLNX,39,1145969,-17 SCCO,15,202622,2 APH,25,504483,0 HLT,44,4372251,-7 Average,30.75,1556331,-5.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.75 hedge funds with bullish positions and the average amount invested in these stocks was $1556 million. That figure was $146 million in TLK's case. Hilton Worldwide Holdings Inc (NYSE:HLT) is the most popular stock in this table. On the other hand Southern Copper Corporation (NYSE:SCCO) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is even less popular than SCCO. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on TLK, though not to the same extent, as the stock returned 3% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.