Is Terreno Realty Corporation (NYSE:TRNO) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Terreno Realty Corporation (NYSE:TRNO) investors should pay attention to an increase in hedge fund interest recently. TRNO was in 10 hedge funds' portfolios at the end of September. There were 9 hedge funds in our database with TRNO positions at the end of the previous quarter. Our calculations also showed that TRNO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most market participants, hedge funds are viewed as underperforming, outdated investment tools of years past. While there are greater than 8000 funds in operation at the moment, Our researchers hone in on the crème de la crème of this group, around 750 funds. These investment experts manage the lion's share of all hedge funds' total capital, and by paying attention to their best stock picks, Insider Monkey has found numerous investment strategies that have historically outstripped the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_673876" align="aligncenter" width="473"] John Overdeck of Two Sigma Advisors[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We're going to take a look at the fresh hedge fund action encompassing Terreno Realty Corporation (NYSE:TRNO).
How are hedge funds trading Terreno Realty Corporation (NYSE:TRNO)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in TRNO a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Terreno Realty Corporation (NYSE:TRNO), which was worth $18.6 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $8.1 million worth of shares. Two Sigma Advisors, Marshall Wace, and Renaissance Technologies 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 Qtron Investments allocated the biggest weight to Terreno Realty Corporation (NYSE:TRNO), around 0.13% of its 13F portfolio. Marshall Wace is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to TRNO.
As industrywide interest jumped, specific money managers were leading the bulls' herd. Marshall Wace, managed by Paul Marshall and Ian Wace, initiated the most outsized position in Terreno Realty Corporation (NYSE:TRNO). Marshall Wace had $5.6 million invested in the company at the end of the quarter. Ronald Hua's Qtron Investments also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new TRNO position is Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's now take a look at hedge fund activity in other stocks similar to Terreno Realty Corporation (NYSE:TRNO). We will take a look at Globant SA (NYSE:GLOB), Sanderson Farms, Inc. (NASDAQ:SAFM), The Goodyear Tire & Rubber Company (NASDAQ:GT), and Silgan Holdings Inc. (NASDAQ:SLGN). All of these stocks' market caps resemble TRNO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLOB,16,70256,2 SAFM,23,410866,3 GT,27,632153,-3 SLGN,16,220385,-2 Average,20.5,333415,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $333 million. That figure was $51 million in TRNO's case. The Goodyear Tire & Rubber Company (NASDAQ:GT) is the most popular stock in this table. On the other hand Globant SA (NYSE:GLOB) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Terreno Realty Corporation (NYSE:TRNO) is even less popular than GLOB. Hedge funds clearly dropped the ball on TRNO as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on TRNO as the stock returned 13.6% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.