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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 September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards The Toro Company (NYSE:TTC).
Is TTC a good stock to buy? The Toro Company (NYSE:TTC) was in 29 hedge funds' portfolios at the end of September. The all time high for this statistic is 32. TTC shareholders have witnessed a decrease in hedge fund interest lately. There were 32 hedge funds in our database with TTC holdings at the end of June. Our calculations also showed that TTC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we're going to take a look at the fresh hedge fund action regarding The Toro Company (NYSE:TTC).
Richard Chilton of Chilton Investment Company
Do Hedge Funds Think TTC Is A Good Stock To Buy Now?
At third quarter's end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from one quarter earlier. On the other hand, there were a total of 32 hedge funds with a bullish position in TTC a year ago. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
The largest stake in The Toro Company (NYSE:TTC) was held by Select Equity Group, which reported holding $447.5 million worth of stock at the end of September. It was followed by Impax Asset Management with a $197.6 million position. Other investors bullish on the company included Fisher Asset Management, Chilton Investment Company, and AQR Capital Management. In terms of the portfolio weights assigned to each position Select Equity Group allocated the biggest weight to The Toro Company (NYSE:TTC), around 1.5% of its 13F portfolio. Bishop Rock Capital is also relatively very bullish on the stock, earmarking 1.41 percent of its 13F equity portfolio to TTC.
Due to the fact that The Toro Company (NYSE:TTC) has witnessed a decline in interest from hedge fund managers, it's easy to see that there lies a certain "tier" of funds that elected to cut their full holdings last quarter. Intriguingly, Seth Cogswell's Running Oak Capital cut the biggest investment of the 750 funds followed by Insider Monkey, worth an estimated $5.9 million in stock. John Brennan's fund, Sirios Capital Management, also dropped its stock, about $2.1 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as The Toro Company (NYSE:TTC) but similarly valued. We will take a look at Vereit Inc (NYSE:VER), Carlisle Companies, Inc. (NYSE:CSL), BorgWarner Inc. (NYSE:BWA), Pegasystems Inc. (NASDAQ:PEGA), IAC/InterActiveCorp (NASDAQ:IAC), Aegon N.V. (NYSE:AEG), and Tapestry, Inc. (NYSE:TPR). This group of stocks' market values match TTC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VER,22,946495,0 CSL,14,89365,-3 BWA,21,170260,-6 PEGA,25,1891439,-2 IAC,47,1426626,-3 AEG,5,12525,-1 TPR,41,887231,0 Average,25,774849,-2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $775 million. That figure was $894 million in TTC's case. IAC/InterActiveCorp (NASDAQ:IAC) is the most popular stock in this table. On the other hand Aegon N.V. (NYSE:AEG) is the least popular one with only 5 bullish hedge fund positions. The Toro Company (NYSE:TTC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TTC is 57.8. 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. 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 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 gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately TTC wasn't nearly as popular as these 5 stocks and hedge funds that were betting on TTC were disappointed as the stock returned 3.5% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.