World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Triton International Limited (NYSE:TRTN) has experienced an increase in hedge fund sentiment in recent months. TRTN was in 18 hedge funds’ portfolios at the end of March. There were 11 hedge funds in our database with TRTN positions at the end of the previous quarter. Our calculations also showed that trtn isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s review the key hedge fund action regarding Triton International Limited (NYSE:TRTN).
What does the smart money think about Triton International Limited (NYSE:TRTN)?
Heading into the second quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 64% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in TRTN a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Triton International Limited (NYSE:TRTN) was held by Laurion Capital Management, which reported holding $12.6 million worth of stock at the end of March. It was followed by Islet Management with a $7.8 million position. Other investors bullish on the company included Spindletop Capital, Arrowstreet Capital, and Citadel Investment Group.
As industrywide interest jumped, key hedge funds have jumped into Triton International Limited (NYSE:TRTN) headfirst. Laurion Capital Management, managed by Benjamin A. Smith, initiated the largest position in Triton International Limited (NYSE:TRTN). Laurion Capital Management had $12.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $7.3 million investment in the stock during the quarter. The other funds with brand new TRTN positions are Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management, and Matthew Halbower’s Pentwater Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Triton International Limited (NYSE:TRTN). We will take a look at Acceleron Pharma Inc (NASDAQ:XLRN), American Equity Investment Life Holding Company (NYSE:AEL), Greif, Inc. (NYSE:GEF), and Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI). This group of stocks’ market values match TRTN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XLRN | 21 | 356860 | 2 |
| AEL | 17 | 84260 | 0 |
| GEF | 21 | 141411 | 1 |
| ARI | 11 | 27403 | 1 |
| Average | 17.5 | 152484 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $59 million in TRTN’s case. Acceleron Pharma Inc (NASDAQ:XLRN) is the most popular stock in this table. On the other hand Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) is the least popular one with only 11 bullish hedge fund positions. Triton International Limited (NYSE:TRTN) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately TRTN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TRTN were disappointed as the stock returned -2.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
