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In this article we will take a look at whether hedge funds think Tompkins Financial Corporation (NYSE:TMP) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Tompkins Financial Corporation (NYSE:TMP) undervalued? Investors who are in the know were getting more bullish. The number of bullish hedge fund bets improved by 3 recently. Tompkins Financial Corporation (NYSE:TMP) was in 7 hedge funds' portfolios at the end of September. The all time high for this statistics is 7. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TMP 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). There were 4 hedge funds in our database with TMP positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are perceived as underperforming, outdated investment vehicles of years past. While there are greater than 8000 funds in operation at the moment, Our experts choose to focus on the top tier of this club, around 850 funds. These hedge fund managers command the lion's share of all hedge funds' total asset base, and by keeping track of their inimitable equity investments, Insider Monkey has spotted various investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship short hedge fund strategy beat 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 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Paul Tudor Jones of Tudor Investment Corp
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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 go over the recent hedge fund action encompassing Tompkins Financial Corporation (NYSE:TMP).
What have hedge funds been doing with Tompkins Financial Corporation (NYSE:TMP)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 75% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TMP over the last 21 quarters. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Tompkins Financial Corporation (NYSE:TMP), with a stake worth $5.8 million reported as of the end of September. Trailing Renaissance Technologies was Winton Capital Management, which amassed a stake valued at $1.6 million. Marshall Wace LLP, Tudor Investment Corp, and ExodusPoint Capital 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 Winton Capital Management allocated the biggest weight to Tompkins Financial Corporation (NYSE:TMP), around 0.05% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to TMP.
As industrywide interest jumped, key money managers have jumped into Tompkins Financial Corporation (NYSE:TMP) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most valuable position in Tompkins Financial Corporation (NYSE:TMP). Marshall Wace LLP had $0.6 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also made a $0.5 million investment in the stock during the quarter. The only other fund with a brand new TMP position is Ken Griffin's Citadel Investment Group.
Let's check out hedge fund activity in other stocks similar to Tompkins Financial Corporation (NYSE:TMP). These stocks are Kaiser Aluminum Corp. (NASDAQ:KALU), Krystal Biotech, Inc. (NASDAQ:KRYS), Lantheus Holdings Inc (NASDAQ:LNTH), Perdoceo Education Corporation (NASDAQ:PRDO), OneSpan Inc. (NASDAQ:OSPN), Veritex Holdings Inc (NASDAQ:VBTX), and ProAssurance Corporation (NYSE:PRA). All of these stocks' market caps are similar to TMP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KALU,16,55745,0 KRYS,10,196697,-3 LNTH,16,150006,-4 PRDO,17,129425,-2 OSPN,13,135496,-2 VBTX,8,29797,-4 PRA,16,116211,-1 Average,13.7,116197,-2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $116 million. That figure was $10 million in TMP's case. Perdoceo Education Corporation (NASDAQ:PRDO) is the most popular stock in this table. On the other hand Veritex Holdings Inc (NASDAQ:VBTX) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Tompkins Financial Corporation (NYSE:TMP) is even less popular than VBTX. Our overall hedge fund sentiment score for TMP is 38. 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. Hedge funds clearly dropped the ball on TMP as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on TMP as the stock returned 18.1% since Q3 (through December 2nd) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.