To many investors, hedge funds are assumed to be useless, old financial tools of a forgotten age. Although there are over 8,000 hedge funds in operation today, this site focuses on the upper echelon of this group, around 525 funds. It is widely held that this group oversees the lion's share of the smart money's total capital, and by keeping an eye on their best equity investments, we've brought to light a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a 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 (see all of our picks from August).
Equally as key, bullish insider trading activity is another way to analyze the investments you're interested in. Obviously, there are lots of incentives for an insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if investors know where to look (learn more here).
Now that that's out of the way, we're going to analyze the newest info surrounding Tetra Tech, Inc. (NASDAQ:TTEK).
At Q2's end, a total of 11 of the hedge funds we track held long positions in this stock, a change of -15% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their holdings substantially.
When using filings from the hedgies we track, Impax Asset Management, managed by Ian Simm, holds the biggest position in Tetra Tech, Inc. (NASDAQ:TTEK). Impax Asset Management has a $30.1 million position in the stock, comprising 3.6% of its 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $27.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Martin Whitman's Third Avenue Management, John I. Dickerson's Summit Global Management and Ken Griffin's Citadel Investment Group.
Due to the fact Tetra Tech, Inc. (NASDAQ:TTEK) has experienced declining interest from the smart money's best and brightest, it's safe to say that there exists a select few money managers that decided to sell off their entire stakes at the end of the second quarter. At the top of the heap, Craig C. Albert's Sheffield Asset Management dumped the largest investment of the 450+ funds we key on, worth an estimated $8 million in stock, and Andy Redleaf of Whitebox Advisors was right behind this move, as the fund said goodbye to about $3 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds at the end of the second quarter.
Insider buying is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Tetra Tech, Inc. (NASDAQ:TTEK) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Tetra Tech, Inc. (NASDAQ:TTEK). These stocks are URS Corp (NYSE:URS), AECOM Technology Corp (NYSE:ACM), The Shaw Group Inc. (NYSE:SHAW), CACI International Inc (NYSE:CACI), and Stantec Inc. (USA) (NYSE:STN). This group of stocks are the members of the technical services industry and their market caps match TTEK's market cap.