Hedge Funds Are Selling Thor Industries, Inc. (THO)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 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. In this article we look at what those investors think of Thor Industries, Inc. (NYSE:THO).

Thor Industries, Inc. (NYSE:THO) investors should be aware of a decrease in enthusiasm from smart money of late. Thor Industries, Inc. (NYSE:THO) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that THO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Ken Heebner of Capital Growth Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s go over the key hedge fund action regarding Thor Industries, Inc. (NYSE:THO).

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

Heading into the second quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in THO over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Is THO A Good Stock To Buy?

According to Insider Monkey’s hedge fund database, Alexander Mitchell’s Scopus Asset Management has the most valuable position in Thor Industries, Inc. (NYSE:THO), worth close to $50.5 million, amounting to 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Value Holdings LP, led by Tim Curro, holding a $26.3 million position; 6% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions consist of Ken Heebner’s Capital Growth Management, Cliff Asness’s AQR Capital Management and Brad Farber’s Atika Capital. In terms of the portfolio weights assigned to each position Value Holdings LP allocated the biggest weight to Thor Industries, Inc. (NYSE:THO), around 6% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, designating 2.28 percent of its 13F equity portfolio to THO.

Because Thor Industries, Inc. (NYSE:THO) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of money managers that elected to cut their full holdings in the first quarter. Intriguingly, Robert Bishop’s Impala Asset Management sold off the largest investment of all the hedgies monitored by Insider Monkey, valued at close to $24.7 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dropped about $19.3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds in the first quarter.

Let’s check out hedge fund activity in other stocks similar to Thor Industries, Inc. (NYSE:THO). These stocks are United Therapeutics Corporation (NASDAQ:UTHR), ICL Group Ltd. (NYSE:ICL), Brunswick Corporation (NYSE:BC), TELUS International (Cda) Inc. (NYSE:TIXT), IAA, Inc. (NYSE:IAA), ChargePoint Holdings, Inc. (NYSE:CHPT), and FLIR Systems, Inc. (NASDAQ:FLIR). This group of stocks’ market valuations match THO’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UTHR 42 2116890 6
ICL 4 43595 -1
BC 42 1037373 6
TIXT 10 36105 10
IAA 35 1199081 0
CHPT 24 207630 24
FLIR 33 959692 5
Average 27.1 800052 7.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $800 million. That figure was $184 million in THO’s case. United Therapeutics Corporation (NASDAQ:UTHR) is the most popular stock in this table. On the other hand ICL Group Ltd. (NYSE:ICL) is the least popular one with only 4 bullish hedge fund positions. Thor Industries, Inc. (NYSE:THO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for THO is 39.4. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately THO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); THO investors were disappointed as the stock returned -21% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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