Is TransCanada Corporation (USA) (TRP) A Good Stock To Buy?

Since TransCanada Corporation (USA) (NYSE:TRP) has witnessed a declination in interest from the smart money, it’s safe to say that there lies a certain “tier” of fund managers that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Zach Schreiber’s Point State Capital dumped the largest stake of the 700 funds tracked by Insider Monkey, valued at about $239.9 million in stock, and Ray Dalio’s Bridgewater Associates was right behind this move, as the fund dumped about $8.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to TransCanada Corporation (USA) (NYSE:TRP). We will take a look at AutoZone, Inc. (NYSE:AZO), Canadian Pacific Railway Limited (USA) (NYSE:CP), Boston Scientific Corporation (NYSE:BSX), and PPL Corporation (NYSE:PPL). This group of stocks’ market caps are closest to TRP’s market cap.

As you can see these stocks had an average of 34.5 hedge funds with bullish positions and the average amount invested in these stocks was $1,869 million. That figure was $398 million in TRP’s case. AutoZone, Inc. (NYSE:AZO) is the most popular stock in this table. On the other hand PPL Corporation (NYSE:PPL) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks TransCanada Corporation (USA) (NYSE:TRP) is even less popular than PPL. 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.