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Is Tutor Perini Corp (TPC) Going to Burn These Hedge Funds?

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Is it smart to be bullish on Tutor Perini Corp (NYSE:TPC)?

If you were to ask many of your peers, hedge funds are perceived as useless, old financial tools of an era lost to time. Although there are more than 8,000 hedge funds trading currently, Insider Monkey looks at the crème de la crème of this group, about 525 funds. It is widely held that this group oversees most of the smart money’s total assets, and by watching their best stock picks, we’ve revealed a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as necessary, optimistic insider trading activity is another way to look at the marketplace. Obviously, there are a variety of motivations for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).

Thus, it’s important to analyze the recent info about Tutor Perini Corp (NYSE:TPC).

Hedge fund activity in Tutor Perini Corp (NYSE:TPC)

At Q2’s end, a total of 8 of the hedge funds we track were bullish in this stock, a change of 33% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially.

Tutor Perini Corp (NYSE:TPC)Out of the hedge funds we follow, Pzena Investment Management, managed by Richard S. Pzena, holds the largest position in Tutor Perini Corp (NYSE:TPC). Pzena Investment Management has a $24.8 million position in the stock, comprising 0.2% of its 13F portfolio. On Pzena Investment Management’s heels is David Dreman of Dreman Value Management, with a $23.1 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Andy Redleaf’s Whitebox Advisors, Cliff Asness’s AQR Capital Management and Matthew Lindenbaum’s Basswood Capital.

As aggregate interest spiked, specific money managers were breaking ground themselves. Pzena Investment Management, managed by Richard S. Pzena, created the largest position in Tutor Perini Corp (NYSE:TPC). Pzena Investment Management had 24.8 million invested in the company at the end of the quarter. David Dreman’s Dreman Value Management also initiated a $23.1 million position during the quarter. The other funds with new positions in the stock are Andy Redleaf’s Whitebox Advisors, Cliff Asness’s AQR Capital Management, and Matthew Lindenbaum’s Basswood Capital.

What do corporate executives and insiders think about Tutor Perini Corp (NYSE:TPC)?

Legal insider trading, particularly when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the last half-year time period, Tutor Perini Corp (NYSE:TPC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Tutor Perini Corp (NYSE:TPC). These stocks are Layne Christensen Company (NASDAQ:LAYN), Dycom Industries, Inc. (NYSE:DY), Granite Construction Inc. (NYSE:GVA), Primoris Services Corp (NASDAQ:PRIM), and Aegion Corp – Class A (NASDAQ:AEGN). This group of stocks are in the heavy construction industry and their market caps resemble TPC’s market cap.

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