The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Tuscan Holdings Corp. (NASDAQ:THCB).
Tuscan Holdings Corp. (NASDAQ:THCB) investors should pay attention to a decrease in enthusiasm from smart money in recent months. Our calculations also showed that THCB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are assumed to be slow, old financial vehicles of the past. While there are more than 8000 funds trading at present, Our researchers choose to focus on the moguls of this club, about 850 funds. Most estimates calculate that this group of people preside over most of all hedge funds' total asset base, and by tracking their first-class picks, Insider Monkey has uncovered various investment strategies that have historically outrun the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_366432" align="aligncenter" width="396"] Jeffrey Tannenbaum of Fir Tree[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's check out the fresh hedge fund action surrounding Tuscan Holdings Corp. (NASDAQ:THCB).
How are hedge funds trading Tuscan Holdings Corp. (NASDAQ:THCB)?
At Q1's end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in THCB a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in Tuscan Holdings Corp. (NASDAQ:THCB) was held by Hudson Bay Capital Management, which reported holding $23.4 million worth of stock at the end of September. It was followed by Millennium Management with a $12.5 million position. Other investors bullish on the company included BlueCrest Capital Mgmt., Fir Tree, and Bayberry Capital Partners. In terms of the portfolio weights assigned to each position Bayberry Capital Partners allocated the biggest weight to Tuscan Holdings Corp. (NASDAQ:THCB), around 1.31% of its 13F portfolio. Fir Tree is also relatively very bullish on the stock, designating 0.62 percent of its 13F equity portfolio to THCB.
Due to the fact that Tuscan Holdings Corp. (NASDAQ:THCB) has faced bearish sentiment from hedge fund managers, logic holds that there is a sect of funds who were dropping their positions entirely heading into Q4. It's worth mentioning that Noah Levy and Eugene Dozortsev's Newtyn Management said goodbye to the biggest investment of the 750 funds followed by Insider Monkey, comprising an estimated $9.8 million in stock. Sander Gerber's fund, Hudson Bay Capital Management, also dropped its stock, about $7.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds heading into Q4.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Tuscan Holdings Corp. (NASDAQ:THCB) but similarly valued. These stocks are Merus N.V. (NASDAQ:MRUS), Triumph Group Inc (NYSE:TGI), PDL BioPharma Inc. (NASDAQ:PDLI), and MRC Global Inc (NYSE:MRC). This group of stocks' market valuations are similar to THCB's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRUS,11,132226,-2 TGI,18,38104,2 PDLI,14,77459,-5 MRC,17,20409,-3 Average,15,67050,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $63 million in THCB's case. Triumph Group Inc (NYSE:TGI) is the most popular stock in this table. On the other hand Merus N.V. (NASDAQ:MRUS) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Tuscan Holdings Corp. (NASDAQ:THCB) is even less popular than MRUS. Hedge funds dodged a bullet by taking a bearish stance towards THCB. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. Unfortunately THCB wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); THCB investors were disappointed as the stock returned 2% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.