We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31, so let’s proceed with the discussion of the hedge fund sentiment on Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC).
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) investors should be aware of an increase in support from the world’s most elite money managers of late. Our calculations also showed that TKC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to analyze the fresh hedge fund action regarding Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC).
How are hedge funds trading Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC)?
Heading into the first quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in TKC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) was held by Oldfield Partners, which reported holding $38.4 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $9.8 million position. Other investors bullish on the company included Two Sigma Advisors, Citadel Investment Group, and Stevens Capital Management. In terms of the portfolio weights assigned to each position Oldfield Partners allocated the biggest weight to Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC), around 3.41% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to TKC.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Stevens Capital Management, managed by Matthew Tewksbury, initiated the most outsized position in Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC). Stevens Capital Management had $0.1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.1 million position during the quarter.
Let’s now review hedge fund activity in other stocks similar to Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC). We will take a look at Mirati Therapeutics, Inc. (NASDAQ:MRTX), Highwoods Properties Inc (NYSE:HIW), Nuance Communications Inc. (NASDAQ:NUAN), and Rexford Industrial Realty Inc (NYSE:REXR). This group of stocks’ market values match TKC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRTX | 32 | 1719243 | -3 |
| HIW | 16 | 188536 | -8 |
| NUAN | 39 | 966448 | 10 |
| REXR | 21 | 50480 | 2 |
| Average | 27 | 731177 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $731 million. That figure was $49 million in TKC’s case. Nuance Communications Inc. (NASDAQ:NUAN) is the most popular stock in this table. On the other hand Highwoods Properties Inc (NYSE:HIW) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is even less popular than HIW. Hedge funds dodged a bullet by taking a bearish stance towards TKC. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th but managed to beat the market by 4.2 percentage points. Unfortunately TKC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); TKC investors were disappointed as the stock returned -17.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
