Hedge Funds Are Crazy About Tri Pointe Homes, Inc. (TPH)

We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Tri Pointe Homes, Inc. (NYSE:TPH) based on that data.

Is Tri Pointe Homes, Inc. (NYSE:TPH) a superb stock to buy now? The best stock pickers were buying. The number of long hedge fund bets moved up by 3 recently. Tri Pointe Homes, Inc. (NYSE:TPH) was in 27 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 32. Our calculations also showed that TPH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 24 hedge funds in our database with TPH positions at the end of the second quarter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to analyze the recent hedge fund action encompassing Tri Pointe Homes, Inc. (NYSE:TPH).

Michael Gelband of ExodusPoint Capital

Do Hedge Funds Think TPH Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from one quarter earlier. By comparison, 31 hedge funds held shares or bullish call options in TPH a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Tri Pointe Homes, Inc. (NYSE:TPH). AQR Capital Management has a $39.7 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $38.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass Ken Fisher’s Fisher Asset Management, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Factorial Partners allocated the biggest weight to Tri Pointe Homes, Inc. (NYSE:TPH), around 1.18% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, earmarking 0.83 percent of its 13F equity portfolio to TPH.

As industrywide interest jumped, key money managers have jumped into Tri Pointe Homes, Inc. (NYSE:TPH) headfirst. Intrinsic Edge Capital, managed by Mark Coe, established the most outsized position in Tri Pointe Homes, Inc. (NYSE:TPH). Intrinsic Edge Capital had $12.1 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also made a $1.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Algert’s Algert Global, Karim Abbadi and Edward McBride’s Centiva Capital, and Michael Gelband’s ExodusPoint Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Tri Pointe Homes, Inc. (NYSE:TPH) but similarly valued. These stocks are Washington Federal Inc. (NASDAQ:WAFD), Otter Tail Corporation (NASDAQ:OTTR), Ligand Pharmaceuticals Inc. (NASDAQ:LGND), TechTarget Inc (NASDAQ:TTGT), Azul S.A. (NYSE:AZUL), Vista Outdoor Inc (NYSE:VSTO), and MYT Netherlands Parent B.V. (NYSE:MYTE). This group of stocks’ market valuations are similar to TPH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WAFD 20 130021 4
OTTR 8 65958 0
LGND 9 82079 2
TTGT 15 123890 1
AZUL 9 104413 -1
VSTO 23 407068 -1
MYTE 9 121915 -9
Average 13.3 147906 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $148 million. That figure was $199 million in TPH’s case. Vista Outdoor Inc (NYSE:VSTO) is the most popular stock in this table. On the other hand Otter Tail Corporation (NASDAQ:OTTR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Tri Pointe Homes, Inc. (NYSE:TPH) is more popular among hedge funds. Our overall hedge fund sentiment score for TPH is 83.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 31.1% in 2021 through December 9th but still managed to beat the market by 5.1 percentage points. Hedge funds were also right about betting on TPH as the stock returned 30.1% since the end of September (through 12/9) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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