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Do Hedge Funds Love Tutor Perini Corp (TPC)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtTutor Perini Corp (NYSE:TPC) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

Is Tutor Perini Corp (NYSE:TPC) ready to rally soon? Prominent investors were becoming less confident. The number of bullish hedge fund bets dropped by 5 recently. Our calculations also showed that TPC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). TPC was in 10 hedge funds’ portfolios at the end of the first quarter of 2020. There were 15 hedge funds in our database with TPC holdings at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are tons of metrics stock market investors can use to grade their holdings. Two of the best metrics are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top investment managers can trounce the S&P 500 by a superb margin (see the details here).

AQR CAPITAL MANAGEMENT

Cliff Asness of AQR Capital Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a look at the fresh hedge fund action surrounding Tutor Perini Corp (NYSE:TPC).

How are hedge funds trading Tutor Perini Corp (NYSE:TPC)?

At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in TPC a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

Is TPC A Good Stock To Buy?

More specifically, TIG Advisors was the largest shareholder of Tutor Perini Corp (NYSE:TPC), with a stake worth $4.7 million reported as of the end of September. Trailing TIG Advisors was Two Sigma Advisors, which amassed a stake valued at $3.5 million. Arrowstreet Capital, Miller Value Partners, and Levin Capital Strategies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position TIG Advisors allocated the biggest weight to Tutor Perini Corp (NYSE:TPC), around 0.19% of its 13F portfolio. Ellington is also relatively very bullish on the stock, earmarking 0.05 percent of its 13F equity portfolio to TPC.

Since Tutor Perini Corp (NYSE:TPC) has faced falling interest from the smart money, it’s safe to say that there is a sect of hedge funds that elected to cut their positions entirely in the first quarter. It’s worth mentioning that Israel Englander’s Millennium Management sold off the biggest investment of the 750 funds followed by Insider Monkey, comprising about $11.1 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $3.6 million worth. These moves are interesting, as total hedge fund interest was cut by 5 funds in the first quarter.

Let’s go over hedge fund activity in other stocks similar to Tutor Perini Corp (NYSE:TPC). These stocks are MidWestOne Financial Group, Inc. (NASDAQ:MOFG), Chesapeake Energy Corporation (NYSE:CHK), Signet Jewelers Limited (NYSE:SIG), and Establishment Labs Holdings Inc. (NASDAQ:ESTA). All of these stocks’ market caps are similar to TPC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MOFG 9 10690 2
CHK 15 12034 -4
SIG 25 72355 3
ESTA 14 64923 4
Average 15.75 40001 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $12 million in TPC’s case. Signet Jewelers Limited (NYSE:SIG) is the most popular stock in this table. On the other hand MidWestOne Financial Group, Inc. (NASDAQ:MOFG) is the least popular one with only 9 bullish hedge fund positions. Tutor Perini Corp (NYSE:TPC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on TPC as the stock returned 81.3% during the second quarter and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.