You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is TPG Specialty Lending Inc (NYSE:TSLX) a great investment today? Money managers are taking an optimistic view. The number of long hedge fund bets rose by 1 lately. TPG Specialty Lending Inc (NYSE:TSLX) was in 6 hedge funds’ portfolios at the end of September. There were 5 hedge funds in our database with TPG Specialty Lending Inc (NYSE:TSLX) holdings at the end of the previous quarter. What is even more surprising is that the slight decline in the stock value, 3.35% during the quarter, had little to no impact on the hedge fund behavior. It prompted us to find out more about the hedge funds holding positions in TPG Specialty Lending Inc (NYSE:TSLX).
The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Continental Building Products Inc (NYSE:CBPX), Virtus Investment Partners Inc (NASDAQ:VRTS), and Global Eagle Acquisition Corp (NASDAQ:ENT) to gather more data points.
Follow Sixth Street Specialty Lending Inc. (NYSE:TSLX)
Follow Sixth Street Specialty Lending Inc. (NYSE:TSLX)
To the average investor, there are tons of tools stock market investors have at their disposal to size up stocks. Some of the most underrated tools are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can outpace the broader indices by a superb margin (see the details here).
With all of this in mind, let’s take a gander at the recent action surrounding TPG Specialty Lending Inc (NYSE:TSLX).
How have hedgies been trading TPG Specialty Lending Inc (NYSE:TSLX)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 20% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Israel Englander’s Millennium Management has the biggest position in TPG Specialty Lending Inc (NYSE:TSLX), worth close to $2 million, corresponding to less than 0.1% of its total 13F portfolio. On Millennium Management’s heels is McKinley Capital Management, managed by Robert B. Gillam, which holds a $2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions comprise D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors, and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, key money managers were breaking ground themselves. John A. Levin’s Levin Capital Strategies made a $0.2 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to TPG Specialty Lending Inc (NYSE:TSLX). We will take a look at Continental Building Products Inc (NYSE:CBPX), Virtus Investment Partners Inc (NASDAQ:VRTS), Global Eagle Acquisition Corp (NASDAQ:ENT), and BroadSoft Inc (NASDAQ:BSFT). This group of stocks’ market caps are similar to TPG Specialty Lending Inc (NYSE:TSLX)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CBPX | 23 | 121613 | 2 |
| VRTS | 11 | 124487 | -2 |
| ENT | 17 | 443234 | -2 |
| BSFT | 14 | 104403 | -2 |
As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $198 million. That figure was $7 million in TPG Specialty Lending Inc (NYSE:TSLX)’s case. Continental Building Products Inc (NYSE:CBPX) is the most popular stock in this table. On the other hand, Virtus Investment Partners Inc (NASDAQ:VRTS) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks, TPG Specialty Lending Inc (NYSE:TSLX) is even less popular than Virtus Investment Partners Inc (NASDAQ:VRTS). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.