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Hedge Funds Are Selling TransUnion (TRU)

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 TransUnion (NYSE:TRU) a splendid investment today? The best stock pickers are getting less bullish. The number of long hedge fund bets dropped by 10 in recent months. TRU was in 19 hedge funds’ portfolios at the end of September. There were 29 hedge funds in our database with TRU holdings at the end of the previous quarter. 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 TIM Participacoes SA (ADR) (NYSE:TSU), Manhattan Associates, Inc. (NASDAQ:MANH), and Empire State Realty Trust Inc (NYSE:ESRT) to gather more data points.

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Now, let’s go over the key action surrounding TransUnion (NYSE:TRU).

What have hedge funds been doing with TransUnion (NYSE:TRU)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -34% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Blue Ridge Capital, managed by John Griffin, holds the largest position in TransUnion (NYSE:TRU). Blue Ridge Capital has a $84.2 million position in the stock, comprising 1% of its 13F portfolio. On Blue Ridge Capital’s heels is Samlyn Capital, managed by Robert Pohly, which holds a $35.6 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Paul Tudor Jones’s Tudor Investment Corp, Ben Gambill’s Tiger Eye Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.

Seeing as TransUnion (NYSE:TRU) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few funds that decided to sell off their positions entirely by the end of the third quarter. It’s worth mentioning that Daniel S. Och’s OZ Management sold off the largest stake of the 700 funds watched by Insider Monkey, valued at close to $72.3 million in stock, and Nick Niell’s Arrowgrass Capital Partners was right behind this move, as the fund dumped about $11.2 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 10 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as TransUnion (NYSE:TRU) but similarly valued. We will take a look at TIM Participacoes SA (ADR) (NYSE:TSU), Manhattan Associates, Inc. (NASDAQ:MANH), Empire State Realty Trust Inc (NYSE:ESRT), and Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR). This group of stocks’ market values match TRU’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TSU 13 273199 -12
MANH 20 224751 6
ESRT 9 148760 -6
ASR 6 56476 2

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $223 million in TRU’s case. Manhattan Associates, Inc. (NASDAQ:MANH) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR) is the least popular one with only 6 bullish hedge fund positions. TransUnion (NYSE:TRU) 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 MANH might be a better candidate to consider a long position.

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