Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Telekomunikasi Indones (Prsr)Tbk PT-ADR (NYSE:TLK).
Telekomunikasi Indones (Prsr)Tbk PT-ADR (NYSE:TLK) investors should pay attention to an increase in support from the world’s most successful money managers recently. TLK was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 8 hedge funds in our database with TLK positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Applied Materials, Inc. (NASDAQ:AMAT), Air Products & Chemicals, Inc. (NYSE:APD), and Estee Lauder Companies Inc (NYSE:EL) to gather more data points.
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What does the smart money think about Telekomunikasi Indones (Prsr)Tbk PT-ADR (NYSE:TLK)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, up by 25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TLK over the last 5 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the number one position in Telekomunikasi Indones (Prsr)Tbk PT-ADR (NYSE:TLK), worth close to $66.8 million. On Arrowstreet Capital’s heels is Renaissance Technologies, one of the largest hedge funds in the world, holding a $42.5 million position. Remaining professional money managers that hold long positions include Ernest Chow and Jonathan Howe’s Sensato Capital Management, David Kowitz and Sheldon Kasowitz’s Indus Capital and Cliff Asness’ AQR Capital Management. We should note that two of these hedge funds (Sensato Capital Management and Indus Capital) 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.
Consequently, some big names have jumped into Telekomunikasi Indones (Prsr)Tbk PT-ADR (NYSE:TLK) headfirst. Indus Capital assembled the largest position in PT Telekomunikasi Indonesia (ADR) (NYSE:TLK) which had $9.3 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Louis Navellier’s Navellier & Associates.
Let’s go over hedge fund activity in other stocks similar to Telekomunikasi Indones (Prsr)Tbk PT-ADR (NYSE:TLK). We will take a look at Applied Materials, Inc. (NASDAQ:AMAT), Air Products & Chemicals, Inc. (NYSE:APD), Estee Lauder Companies Inc (NYSE:EL), and Boston Scientific Corporation (NYSE:BSX). All of these stocks’ market caps are closest to TLK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMAT | 57 | 2527003 | 10 |
| APD | 56 | 4335573 | 0 |
| EL | 29 | 741427 | 4 |
| BSX | 46 | 1735257 | -1 |
As you can see these stocks had an average of 47 hedge funds with bullish positions and the average amount invested in these stocks was $2.33 billion. That figure was $136 million in TLK’s case. Applied Materials, Inc. (NASDAQ:AMAT) is the most popular stock in this table. On the other hand Estee Lauder Companies Inc (NYSE:EL) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Telekomunikasi Indones (Prsr)Tbk PT-ADR (NYSE:TLK) is even less popular than EL. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None
