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Hedge Funds Are Betting On TravelCenters of America LLC (TA)

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th. In this article we are going to take a look at smart money sentiment towards TravelCenters of America LLC (NYSEAMEX:TA).

Is TravelCenters of America LLC (NYSEAMEX:TA) a sound stock to buy now? Hedge funds are getting more bullish. The number of bullish hedge fund bets increased by 2 in recent months. Our calculations also showed that ta isn’t among the 30 most popular stocks among hedge funds. TA was in 11 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with TA positions at the end of the previous quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Overdeck of Two Sigma

We’re going to view the fresh hedge fund action regarding TravelCenters of America LLC (NYSEAMEX:TA).

How have hedgies been trading TravelCenters of America LLC (NYSEAMEX:TA)?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from one quarter earlier. On the other hand, there were a total of 10 hedge funds with a bullish position in TA at the beginning of this year. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

No of Hedge Funds with TA Positions

Among these funds, Renaissance Technologies held the most valuable stake in TravelCenters of America LLC (NYSEAMEX:TA), which was worth $10.7 million at the end of the third quarter. On the second spot was Nantahala Capital Management which amassed $4.3 million worth of shares. Moreover, Two Sigma Advisors, Granite Point Capital, and Millennium Management were also bullish on TravelCenters of America LLC (NYSEAMEX:TA), allocating a large percentage of their portfolios to this stock.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Granite Point Capital, managed by Warren Lammert, initiated the largest position in TravelCenters of America LLC (NYSEAMEX:TA). Granite Point Capital had $1.1 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0 million position during the quarter. The following funds were also among the new TA investors: Matthew Hulsizer’s PEAK6 Capital Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s go over hedge fund activity in other stocks similar to TravelCenters of America LLC (NASDAQ:TA). We will take a look at Apollo Tactical Income Fund Inc. (NYSE:AIF), MIDSTATES PETROLEUM COMPANY, INC. (NYSE:MPO), eGain Corporation (NASDAQ:EGAN), and The Gabelli Multimedia Trust Inc. (NYSE:GGT). This group of stocks’ market values match TA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AIF 2 428 -1
MPO 17 136251 2
EGAN 10 22508 -1
GGT 1 6817 0
Average 7.5 41501 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $19 million in TA’s case. MIDSTATES PETROLEUM COMPANY, INC. (NYSE:MPO) is the most popular stock in this table. On the other hand The Gabelli Multimedia Trust Inc. (NYSE:GGT) is the least popular one with only 1 bullish hedge fund positions. TravelCenters of America LLC (NASDAQ:TA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MPO might be a better candidate to consider a long position.

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

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