Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of The Toronto-Dominion Bank (NYSE:TD).
The Toronto-Dominion Bank (NYSE:TD) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 18 hedge funds' portfolios at the end of the second quarter of 2019. At the end of this article we will also compare TD to other stocks including American Express Company (NYSE:AXP), Lockheed Martin Corporation (NYSE:LMT), and Starbucks Corporation (NASDAQ:SBUX) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are assumed to be worthless, old investment vehicles of the past. While there are over 8000 funds in operation today, Our researchers look at the bigwigs of this group, around 750 funds. Most estimates calculate that this group of people oversee most of the hedge fund industry's total asset base, and by following their unrivaled picks, Insider Monkey has determined numerous investment strategies that have historically defeated the S&P 500 index. Insider Monkey's flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a peek at the fresh hedge fund action surrounding The Toronto-Dominion Bank (NYSE:TD).
How have hedgies been trading The Toronto-Dominion Bank (NYSE:TD)?
At Q2's end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in TD a year ago. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies has the most valuable position in The Toronto-Dominion Bank (NYSE:TD), worth close to $300.5 million, amounting to 0.3% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $173 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish encompass D. E. Shaw's D E Shaw, Ray Dalio's Bridgewater Associates and Noam Gottesman's GLG Partners.
Seeing as The Toronto-Dominion Bank (NYSE:TD) has witnessed a decline in interest from hedge fund managers, it's safe to say that there were a few fund managers that decided to sell off their positions entirely in the second quarter. Interestingly, Dmitry Balyasny's Balyasny Asset Management sold off the biggest position of the 750 funds tracked by Insider Monkey, comprising about $9.1 million in stock. Michael Platt and William Reeves's fund, BlueCrest Capital Mgmt., also said goodbye to its stock, about $1.8 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as The Toronto-Dominion Bank (NYSE:TD) but similarly valued. We will take a look at American Express Company (NYSE:AXP), Lockheed Martin Corporation (NYSE:LMT), Starbucks Corporation (NASDAQ:SBUX), and Danaher Corporation (NYSE:DHR). This group of stocks' market caps match TD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AXP,45,22025448,-12 LMT,48,1348962,13 SBUX,49,5242004,2 DHR,58,2775439,0 Average,50,7847963,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 50 hedge funds with bullish positions and the average amount invested in these stocks was $7848 million. That figure was $648 million in TD's case. Danaher Corporation (NYSE:DHR) is the most popular stock in this table. On the other hand American Express Company (NYSE:AXP) is the least popular one with only 45 bullish hedge fund positions. Compared to these stocks The Toronto-Dominion Bank (NYSE:TD) is even less popular than AXP. Hedge funds dodged a bullet by taking a bearish stance towards TD. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately TD wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); TD investors were disappointed as the stock returned 0.8% during the third quarter 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 in 2019.
Disclosure: None. This article was originally published at Insider Monkey.