The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Titan Machinery Inc. (NASDAQ:TITN) based on those filings.
Is Titan Machinery Inc. (NASDAQ:TITN) the right pick for your portfolio? The smart money is getting more optimistic. The number of bullish hedge fund bets rose by 1 recently. Our calculations also showed that TITN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). TITN was in 8 hedge funds' portfolios at the end of March. There were 7 hedge funds in our database with TITN holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are seen as worthless, old investment tools of years past. While there are over 8000 funds trading today, Our experts look at the bigwigs of this club, approximately 850 funds. It is estimated that this group of investors watch over most of the hedge fund industry's total asset base, and by watching their first-class stock picks, Insider Monkey has determined numerous investment strategies that have historically outperformed Mr. Market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_673876" align="aligncenter" width="400"] John Overdeck of Two Sigma Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to check out the recent hedge fund action regarding Titan Machinery Inc. (NASDAQ:TITN).
What does smart money think about Titan Machinery Inc. (NASDAQ:TITN)?
At Q1's end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TITN over the last 18 quarters. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Rutabaga Capital Management was the largest shareholder of Titan Machinery Inc. (NASDAQ:TITN), with a stake worth $3.5 million reported as of the end of September. Trailing Rutabaga Capital Management was Renaissance Technologies, which amassed a stake valued at $3.5 million. Two Sigma Advisors, Invenomic Capital Management, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Rutabaga Capital Management allocated the biggest weight to Titan Machinery Inc. (NASDAQ:TITN), around 2.11% of its 13F portfolio. Invenomic Capital Management is also relatively very bullish on the stock, setting aside 0.82 percent of its 13F equity portfolio to TITN.
As industrywide interest jumped, specific money managers have jumped into Titan Machinery Inc. (NASDAQ:TITN) headfirst. Citadel Investment Group, managed by Ken Griffin, created the most outsized position in Titan Machinery Inc. (NASDAQ:TITN). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter.
Let's now take a look at hedge fund activity in other stocks similar to Titan Machinery Inc. (NASDAQ:TITN). We will take a look at Radiant Logistics, Inc. (NYSE:RLGT), Protagonist Therapeutics, Inc. (NASDAQ:PTGX), Recro Pharma Inc (NASDAQ:REPH), and Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC). This group of stocks' market values are similar to TITN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RLGT,11,7323,-2 PTGX,15,48172,-2 REPH,11,40930,-6 NGVC,9,15433,-1 Average,11.5,27965,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $11 million in TITN's case. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) is the most popular stock in this table. On the other hand Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Titan Machinery Inc. (NASDAQ:TITN) is even less popular than NGVC. Hedge funds dodged a bullet by taking a bearish stance towards TITN. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but managed to beat the market by 14.8 percentage points. Unfortunately TITN wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); TITN investors were disappointed as the stock returned 18% during the second quarter (through June 17th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.