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With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Thor Industries, Inc. (NYSE:THO).
Is THO a good stock to buy? Thor Industries, Inc. (NYSE:THO) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 39 hedge funds' portfolios at the end of September. Our calculations also showed that THO 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). At the end of this article we will also compare THO to other stocks including Aegon N.V. (NYSE:AEG), Allogene Therapeutics, Inc. (NASDAQ:ALLO), and Hyatt Hotels Corporation (NYSE:H) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a multitude of formulas stock traders employ to evaluate stocks. A couple of the most underrated formulas are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the best fund managers can outpace their index-focused peers by a superb margin (see the details here).
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Keeping this in mind let's take a peek at the latest hedge fund action surrounding Thor Industries, Inc. (NYSE:THO).
Do Hedge Funds Think THO Is A Good Stock To Buy Now?
At Q3's end, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 30 hedge funds held shares or bullish call options in THO 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, Scopus Asset Management held the most valuable stake in Thor Industries, Inc. (NYSE:THO), which was worth $59.5 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $39.5 million worth of shares. Arrowstreet Capital, Citadel Investment Group, and Value Holdings LP 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 Value Holdings LP allocated the biggest weight to Thor Industries, Inc. (NYSE:THO), around 6.25% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, setting aside 1.79 percent of its 13F equity portfolio to THO.
Due to the fact that Thor Industries, Inc. (NYSE:THO) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers that elected to cut their full holdings heading into Q4. Interestingly, Richard S. Meisenberg's ACK Asset Management said goodbye to the biggest stake of the 750 funds followed by Insider Monkey, totaling about $6.8 million in stock. Javier Velazquez's fund, Albar Capital, also sold off its stock, about $3.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks similar to Thor Industries, Inc. (NYSE:THO). We will take a look at Aegon N.V. (NYSE:AEG), Allogene Therapeutics, Inc. (NASDAQ:ALLO), Hyatt Hotels Corporation (NYSE:H), Invesco Ltd. (NYSE:IVZ), First Horizon National Corporation (NYSE:FHN), Axalta Coating Systems Ltd (NYSE:AXTA), and MSA Safety Incorporated (NYSE:MSA). This group of stocks' market values are closest to THO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AEG,3,11800,-1 ALLO,21,248617,-3 H,26,574829,-1 IVZ,21,600095,-1 FHN,30,378810,-5 AXTA,45,1220833,-2 MSA,14,18753,-12 Average,22.9,436248,-3.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $436 million. That figure was $274 million in THO's case. Axalta Coating Systems Ltd (NYSE:AXTA) is the most popular stock in this table. On the other hand Aegon N.V. (NYSE:AEG) is the least popular one with only 3 bullish hedge fund positions. Thor Industries, Inc. (NYSE:THO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for THO is 75.7. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 33.3% in 2020 through December 18th and beat the market again by 16.4 percentage points. Unfortunately THO wasn't nearly as popular as these 20 stocks and hedge funds that were betting on THO were disappointed as the stock returned 0.8% since the end of September (through 12/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.