Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is Tarena International Inc (ADR) (NASDAQ:TEDU) going to take off soon? Hedge funds are actually actually taking a pessimistic view. The number of bullish hedge fund investments were cut by 1 in recent months. There were 8 hedge funds in our database with TEDU holdings at the end of the previous quarter. At the end of this article we will also compare TEDU to other stocks including First Community Bancshares Inc (NASDAQ:FCBC), Tsakos Energy Navigation Ltd. (NYSE:TNP), and TG Therapeutics Inc (NASDAQ:TGTX) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Sarawut Aiemsinsuk/Shutterstock.com
Keeping this in mind, let’s go over the fresh action surrounding Tarena International Inc (ADR) (NASDAQ:TEDU).
What does the smart money think about Tarena International Inc (ADR) (NASDAQ:TEDU)?
Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in TEDU heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Wang Chen’s Serenity Capital has the number one position in Tarena International Inc (ADR) (NASDAQ:TEDU), worth close to $10.7 million, amounting to 3.5% of its total 13F portfolio. On Serenity Capital’s heels is Renaissance Technologies, one of the biggest hedge funds in the world, which holds a $4.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions comprise D. E. Shaw’s D E Shaw, Gifford Combs’s Dalton Investments and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as Tarena International Inc (ADR) (NASDAQ:TEDU) has weathered falling interest from the smart money, it’s easy to see that there were a few money managers that elected to cut their full holdings by the end of the third quarter. Interestingly, Brian Taylor’s Pine River Capital Management said goodbye to the largest stake of the 700 funds followed by Insider Monkey, comprising an estimated $0.5 million in stock. Charles Clough’s fund, Clough Capital Partners, also sold off its stock, about $0.2 million worth.
Let’s now take a look at hedge fund activity in other stocks similar to Tarena International Inc (ADR) (NASDAQ:TEDU). We will take a look at First Community Bancshares Inc (NASDAQ:FCBC), Tsakos Energy Navigation Ltd. (NYSE:TNP), TG Therapeutics Inc (NASDAQ:TGTX), and One Liberty Properties, Inc. (NYSE:OLP). This group of stocks’ market values match TEDU’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FCBC | 4 | 5955 | 0 |
| TNP | 10 | 34924 | -5 |
| TGTX | 5 | 96973 | -4 |
| OLP | 7 | 13555 | 1 |
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $22 million in TEDU’s case. Tsakos Energy Navigation Ltd. (NYSE:TNP) is the most popular stock in this table. On the other hand First Community Bancshares Inc (NASDAQ:FCBC) is the least popular one with only 4 bullish hedge fund positions. Tarena International Inc (ADR) (NASDAQ:TEDU) 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 TNP might be a better candidate to consider taking a long position in.
Suggested Articles:
Cheapest Countries To Live Like A King
Countries With The Worst Quality Of Life
Most Expensive Countries To Buy And Own A Car
Disclosure: None
