5 Retailers Hedge Funds Are Bailing On As Inflation Soars

2. The TJX Companies, Inc. (NYSE:TJX)

Number of Hedge Fund Shareholders: 56

Hedge fund ownership of The TJX Companies, Inc. (NYSE:TJX) peaked in Q3 2020 after rising steadily for several years. It’s cratered by 29% since then however, falling over five of the last six quarters. James Dinan’s York Capital Management and Chris James’ Engine No. 1 LLC are some of the funds that sold off their TJX positions over the past few quarters.

The TJX Companies, Inc. (NYSE:TJX) is in somewhat of a better position than other retailers given the unique way in which it sources discounted products, which allows it to avoid some of the supply chain woes ailing other retailers. TJX has grown EPS by an average of about 10% over the last ten years, and that trend appears to be intact thanks to the company resuming its share repurchase program after briefly hoarding cash at the outset of the pandemic.

The ClearBridge Investments Large Cap Value Strategy liked the potential post-pandemic customer surge to The TJX Companies, Inc. (NYSE:TJX), as revealed in the fund’s Q4 2021 investor letter:

“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year, for example, in positioning the portfolio to benefit from a flush consumer eager to return to spending and traveling. New positions included TJX, an off-brand retailer with a large presence in the U.S. and Europe that should continue to benefit from the contraction of many traditional retailers, particularly as consumer spending resumes.”