We can judge whether T. Rowe Price Group, Inc. (NASDAQ:TROW) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Is T. Rowe Price Group, Inc. (NASDAQ:TROW) going to take off soon? Investors who are in the know are in an optimistic mood. The number of long hedge fund positions advanced by 4 recently. Our calculations also showed that TROW isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the fresh hedge fund action surrounding T. Rowe Price Group, Inc. (NASDAQ:TROW).
How have hedgies been trading T. Rowe Price Group, Inc. (NASDAQ:TROW)?
At the end of the second quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. By comparison, 25 hedge funds held shares or bullish call options in TROW a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in T. Rowe Price Group, Inc. (NASDAQ:TROW), which was worth $82.7 million at the end of the second quarter. On the second spot was Citadel Investment Group which amassed $41.2 million worth of shares. Moreover, AQR Capital Management, Markel Gayner Asset Management, and Adage Capital Management were also bullish on T. Rowe Price Group, Inc. (NASDAQ:TROW), allocating a large percentage of their portfolios to this stock.
Now, some big names have jumped into T. Rowe Price Group, Inc. (NASDAQ:TROW) headfirst. Strycker View Capital, managed by Usman Waheed, created the biggest position in T. Rowe Price Group, Inc. (NASDAQ:TROW). Strycker View Capital had $11 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $3.9 million position during the quarter. The following funds were also among the new TROW investors: Peter Seuss’s Prana Capital Management, D. E. Shaw’s D E Shaw, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
Let’s check out hedge fund activity in other stocks similar to T. Rowe Price Group, Inc. (NASDAQ:TROW). These stocks are Ventas, Inc. (NYSE:VTR), Discover Financial Services (NYSE:DFS), Waste Connections, Inc. (NYSE:WCN), and Verisign, Inc. (NASDAQ:VRSN). All of these stocks’ market caps are closest to TROW’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VTR | 18 | 385834 | -1 |
| DFS | 39 | 935868 | 3 |
| WCN | 26 | 429678 | 0 |
| VRSN | 32 | 6013225 | 1 |
| Average | 28.75 | 1941151 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $1941 million. That figure was $330 million in TROW’s case. Discover Financial Services (NYSE:DFS) is the most popular stock in this table. On the other hand Ventas, Inc. (NYSE:VTR) is the least popular one with only 18 bullish hedge fund positions. T. Rowe Price Group, Inc. (NASDAQ:TROW) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on TROW, though not to the same extent, as the stock returned 4.8% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
