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: Tejon Ranch Company (NYSE:TRC).
Tejon Ranch Company (NYSE:TRC) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare TRC to other stocks including Cynapsus Therapeutics Inc (NASDAQ:CYNA), Flamel Technologies S.A. (ADR) (NASDAQ:FLML), and Shoe Carnival, Inc. (NASDAQ:SCVL) 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.
Now, we’re going to go over the fresh action regarding Tejon Ranch Company (NYSE:TRC).
How are hedge funds trading Tejon Ranch Company (NYSE:TRC)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards TRC over the last 5 quarters. So, let’s see 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, Martin Whitman’s Third Avenue Management has the biggest position in Tejon Ranch Company (NYSE:TRC), worth close to $54.7 million, accounting for 2.5% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, led by Chuck Royce, holding a $37.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions contain Michael Price’s MFP Investors, Mario Gabelli’s GAMCO Investors and John A. Levin’s Levin Capital Strategies. We should note that MFP Investors is 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.