Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 5.2% in the 12 months ending October 30, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, hedge funds’ 30 preferred S&P 500 stocks (as of September 2014) generated a return of 9.5% during the same 12-month period, with 63% of these stock picks outperformed the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 16-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Tech Data Corp (NASDAQ:TECD).
Tech Data Corp (NASDAQ:TECD) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. 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 AMAYA INC (NASDAQ:AYA), Healthcare Services Group, Inc. (NASDAQ:HCSG), and Energizer Holdings, Inc. (NYSE:ENR) to gather more data points.
Now, we’re going to take a look at the new action regarding Tech Data Corp (NASDAQ:TECD).
What does the smart money think about Tech Data Corp (NASDAQ:TECD)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Joel Greenblatt’s Gotham Asset Management has the largest position in Tech Data Corp (NASDAQ:TECD), worth close to $60.2 million, amounting to 0.6% of its total 13F portfolio. On Gotham Asset Management’s heels is AQR Capital Management, led by Cliff Asness, holding a $47.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism contain Richard S. Pzena’s Pzena Investment Management, David Dreman’s Dreman Value Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.