U.S. markets close in 5 hours 31 minutes
  • S&P 500

    3,784.46
    +16.21 (+0.43%)
     
  • Dow 30

    30,892.76
    +78.50 (+0.25%)
     
  • Nasdaq

    13,085.76
    +87.25 (+0.67%)
     
  • Russell 2000

    2,138.93
    +15.73 (+0.74%)
     
  • Crude Oil

    52.75
    +0.39 (+0.74%)
     
  • Gold

    1,833.40
    +3.50 (+0.19%)
     
  • Silver

    25.09
    +0.23 (+0.92%)
     
  • EUR/USD

    1.2132
    +0.0048 (+0.40%)
     
  • 10-Yr Bond

    1.1140
    +0.0170 (+1.55%)
     
  • GBP/USD

    1.3606
    +0.0020 (+0.14%)
     
  • USD/JPY

    104.0050
    +0.3180 (+0.31%)
     
  • BTC-USD

    37,069.22
    +627.49 (+1.72%)
     
  • CMC Crypto 200

    732.55
    +17.36 (+2.43%)
     
  • FTSE 100

    6,704.86
    -15.79 (-0.23%)
     
  • Nikkei 225

    28,633.46
    +391.25 (+1.39%)
     

Is TBI A Good Stock To Buy Now?

Reymerlyn Martin
·6 min read

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Trueblue Inc (NYSE:TBI).

Is TBI a good stock to buy now? Trueblue Inc (NYSE:TBI) investors should be aware of an increase in enthusiasm from smart money lately. Trueblue Inc (NYSE:TBI) was in 15 hedge funds' portfolios at the end of September. The all time high for this statistic is 17. Our calculations also showed that TBI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 S&P 500 ETFs by more than 66 percentage points since March 2017 (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. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.

Gavin Saitowitz of Prelude Capital
Gavin Saitowitz of Prelude Capital

Gavin Saitowitz of Prelude Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let's analyze the recent hedge fund action regarding Trueblue Inc (NYSE:TBI).

Do Hedge Funds Think TBI Is A Good Stock To Buy Now?

At the end of September, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the second quarter of 2020. By comparison, 14 hedge funds held shares or bullish call options in TBI a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey's hedge fund database, Richard S. Pzena's Pzena Investment Management has the largest position in Trueblue Inc (NYSE:TBI), worth close to $15.6 million, comprising 0.1% of its total 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $9.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions consist of D. E. Shaw's D E Shaw, Chuck Royce's Royce & Associates and Renaissance Technologies. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Trueblue Inc (NYSE:TBI), around 0.55% of its 13F portfolio. Pzena Investment Management is also relatively very bullish on the stock, dishing out 0.1 percent of its 13F equity portfolio to TBI.

With a general bullishness amongst the heavyweights, key money managers have jumped into Trueblue Inc (NYSE:TBI) headfirst. Pzena Investment Management, managed by Richard S. Pzena, created the largest position in Trueblue Inc (NYSE:TBI). Pzena Investment Management had $15.6 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also initiated a $0.5 million position during the quarter. The only other fund with a brand new TBI position is Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital).

Let's now take a look at hedge fund activity in other stocks similar to Trueblue Inc (NYSE:TBI). These stocks are National Energy Services Reunited Corp. (NASDAQ:NESR), MarineMax, Inc. (NYSE:HZO), XBiotech Inc. (NASDAQ:XBIT), Independence Holding Company (NYSE:IHC), OneSpaWorld Holdings Limited (NASDAQ:OSW), Green Plains Inc. (NASDAQ:GPRE), and Genesis Energy, L.P. (NYSE:GEL). All of these stocks' market caps resemble TBI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NESR,8,26931,0 HZO,21,52688,0 XBIT,4,2598,0 IHC,5,26115,0 OSW,10,67325,-4 GPRE,17,156646,-3 GEL,3,6208,-1 Average,9.7,48359,-1.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $46 million in TBI's case. MarineMax, Inc. (NYSE:HZO) is the most popular stock in this table. On the other hand Genesis Energy, L.P. (NYSE:GEL) is the least popular one with only 3 bullish hedge fund positions. Trueblue Inc (NYSE:TBI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TBI is 65.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on TBI as the stock returned 20.5% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Get real-time email alerts: Follow Trueblue Inc. (NYSE:TBI)

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

Related Content