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After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards TETRA Technologies, Inc. (NYSE:TTI).
TETRA Technologies, Inc. (NYSE:TTI) investors should pay attention to an increase in activity from the world's largest hedge funds of late. TETRA Technologies, Inc. (NYSE:TTI) was in 22 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that TTI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we're going to take a glance at the recent hedge fund action encompassing TETRA Technologies, Inc. (NYSE:TTI).
Do Hedge Funds Think TTI Is A Good Stock To Buy Now?
At first quarter's end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 69% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in TTI 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.
According to Insider Monkey's hedge fund database, Huber Capital Management, managed by Joe Huber, holds the biggest position in TETRA Technologies, Inc. (NYSE:TTI). Huber Capital Management has a $7 million position in the stock, comprising 1.9% of its 13F portfolio. Coming in second is Roumell Asset Management, managed by Jim Roumell, which holds a $6 million position; the fund has 8.7% of its 13F portfolio invested in the stock. Some other peers that hold long positions comprise Israel Englander's Millennium Management, Mark Coe's Intrinsic Edge Capital and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position Roumell Asset Management allocated the biggest weight to TETRA Technologies, Inc. (NYSE:TTI), around 8.66% of its 13F portfolio. Huber Capital Management is also relatively very bullish on the stock, setting aside 1.9 percent of its 13F equity portfolio to TTI.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls' herd. Intrinsic Edge Capital, managed by Mark Coe, assembled the biggest position in TETRA Technologies, Inc. (NYSE:TTI). Intrinsic Edge Capital had $3.7 million invested in the company at the end of the quarter. Mike Masters's Masters Capital Management also initiated a $2.4 million position during the quarter. The following funds were also among the new TTI investors: Paul Marshall and Ian Wace's Marshall Wace LLP, Michael Gelband's ExodusPoint Capital, and Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners.
Let's now review hedge fund activity in other stocks similar to TETRA Technologies, Inc. (NYSE:TTI). We will take a look at Century Casinos, Inc. (NASDAQ:CNTY), Peoples Financial Services Corp. (NASDAQ:PFIS), Tyme Technologies, Inc. (NASDAQ:TYME), GP Strategies Corporation (NYSE:GPX), Pioneer Bancorp, Inc. (NASDAQ:PBFS), NN, Inc. (NASDAQ:NNBR), and HC2 Holdings Inc (NYSE:HCHC). This group of stocks' market valuations resemble TTI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNTY,11,43205,-1 PFIS,3,3105,1 TYME,5,3243,4 GPX,9,47058,0 PBFS,1,121,-1 NNBR,10,63948,2 HCHC,11,25421,0 Average,7.1,26586,0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.1 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $37 million in TTI's case. Century Casinos, Inc. (NASDAQ:CNTY) is the most popular stock in this table. On the other hand Pioneer Bancorp, Inc. (NASDAQ:PBFS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks TETRA Technologies, Inc. (NYSE:TTI) is more popular among hedge funds. Our overall hedge fund sentiment score for TTI is 88.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 23.8% in 2021 through July 16th but still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on TTI as the stock returned 36.3% since the end of March (through 7/16) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.