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How TETRA Technologies, Inc. (TTI) Stacks Up Against Its Peers

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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 7.6% in the 12 months ending November 21, 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, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-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 TETRA Technologies, Inc. (NYSE:TTI) .

TETRA Technologies, Inc. (NYSE:TTI) investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 17 hedge funds in our database with TTI positions at the end of September. 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 decline in popularity but it may still be more popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ashford Hospitality Trust, Inc. (NYSE:AHT), Great Southern Bancorp, Inc. (NASDAQ:GSBC), and Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) to gather more data points.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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Now, let’s take a look at the key action surrounding TETRA Technologies, Inc. (NYSE:TTI).

How have hedgies been trading TETRA Technologies, Inc. (NYSE:TTI)?

Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -26% from the previous quarter. By comparison, 18 hedge funds held shares or bullish call options in TTI heading into this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

TTI Chart

Of the funds tracked by Insider Monkey, Point72 Asset Management, led by Steve Cohen, holds the biggest position in TETRA Technologies, Inc. (NYSE:TTI). Point72 Asset Management has a $22.9 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, one of the 10 largest hedge funds in the world, which holds a $13.6 million position. Remaining professional money managers that are bullish consist of Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw. We should note that none of these hedge funds 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.

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