Are Hedge Funds On To Something With Tetra Tech, Inc. (TTEK)?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Tetra Tech, Inc. (NASDAQ:TTEK) .

Is Tetra Tech, Inc. (NASDAQ:TTEK) a cheap investment right now? The best stock pickers are becoming more confident. The number of bullish hedge fund bets that are revealed through the 13F filings inched up by 1 lately. TTEK was in 18 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with TTEK holdings at the end of the previous quarter. At the end of this article we will also compare TTEK to other stocks including Barnes Group Inc. (NYSE:B), Alexander & Baldwin Inc (NYSE:ALEX), and Healthequity Inc (NASDAQ:HQY) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

How are hedge funds trading Tetra Tech, Inc. (NASDAQ:TTEK)?

Heading into the fourth quarter of 2016, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a rise of 6% from the second quarter of 2016, and the third-straight quarter that hedge fund ownership has inched up by 1 fund. Below, you can check out the change in hedge fund sentiment towards TTEK over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Richard S. Pzena’s Pzena Investment Management has the largest position in Tetra Tech, Inc. (NASDAQ:TTEK), worth close to $21.1 million. The second largest stake is held by Mark Travis of Intrepid Capital Management, with a $18.7 million position; the fund has 8.8% of its 13F portfolio invested in the stock. Other peers that are bullish consist of Tim Curro’s Value Holdings LP, Joel Greenblatt’s Gotham Asset Management, and Martin Whitman’s Third Avenue Management. We should note that two of these hedge funds (Intrepid Capital Management and Value Holdings LP) are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, specific money managers were breaking ground themselves. Gotham Asset Management initiated the most outsized position in Tetra Tech, Inc. (NASDAQ:TTEK) which had $6.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0.7 million investment in the stock during the quarter. The following funds were also among the new TTEK investors: Israel Englander’s Millennium Management and Dmitry Balyasny’s Balyasny Asset Management.

Let’s now take a look at hedge fund activity in other stocks similar to Tetra Tech, Inc. (NASDAQ:TTEK). These stocks are Barnes Group Inc. (NYSE:B), Alexander & Baldwin Inc (NYSE:ALEX), Healthequity Inc (NASDAQ:HQY), and Applied Industrial Technologies (NYSE:AIT). All of these stocks’ market caps resemble TTEK’s market cap.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $75 million in TTEK’s case. Barnes Group Inc. (NYSE:B) is the most popular stock in this table. On the other hand Alexander & Baldwin Inc (NYSE:ALEX) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Tetra Tech, Inc. (NASDAQ:TTEK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None