How do we determine whether Thomson Reuters Corporation (NYSE:TRI) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Thomson Reuters Corporation (NYSE:TRI) was in 24 hedge funds' portfolios at the end of the third quarter of 2018. TRI investors should be aware of an increase in activity from the world's largest hedge funds of late. There were 14 hedge funds in our database with TRI positions at the end of the previous quarter. Our calculations also showed that TRI isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a look at the latest hedge fund action surrounding Thomson Reuters Corporation (NYSE:TRI).
What does the smart money think about Thomson Reuters Corporation (NYSE:TRI)?
Heading into the fourth quarter of 2018, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 71% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in TRI at the beginning of this year. 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 publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Griffin's Citadel Investment Group has the biggest position in Thomson Reuters Corporation (NYSE:TRI), worth close to $153.8 million, accounting for 0.1% of its total 13F portfolio. The second most bullish fund manager is Samlyn Capital, managed by Robert Pohly, which holds a $36.5 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions consist of D. E. Shaw's D E Shaw, James Parsons's Junto Capital Management and Usman Waheed's Strycker View Capital.
As industrywide interest jumped, some big names were leading the bulls' herd. Samlyn Capital, managed by Robert Pohly, established the largest position in Thomson Reuters Corporation (NYSE:TRI). Samlyn Capital had $36.5 million invested in the company at the end of the quarter. James Parsons's Junto Capital Management also initiated a $27.9 million position during the quarter. The following funds were also among the new TRI investors: Benjamin A. Smith's Laurion Capital Management, Israel Englander's Millennium Management, and Philip Hilal's Clearfield Capital.
Let's check out hedge fund activity in other stocks similar to Thomson Reuters Corporation (NYSE:TRI). These stocks are State Street Corporation (NYSE:STT), Workday Inc (NASDAQ:WDAY), Worldpay, Inc. (NYSE:WP), and Fresenius Medical Care AG & Co. KGaA (NYSE:FMS). All of these stocks' market caps are closest to TRI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STT,35,1268343,-1 WDAY,30,1148004,-1 WP,60,3562567,14 FMS,6,26587,-1 Average,32.75,1501375,2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.50 billion. That figure was $392 million in TRI's case. Worldpay, Inc. (NYSE:WP) is the most popular stock in this table. On the other hand Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) is the least popular one with only 6 bullish hedge fund positions. Thomson Reuters Corporation (NYSE:TRI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. In this regard WP might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.