Hedge Funds Have Never Been This Bullish On Telaria, Inc. (TLRA)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 28, so let’s proceed with the discussion of the hedge fund sentiment on Telaria, Inc. (NYSE:TLRA).

Is Telaria, Inc. (NYSE:TLRA) the right investment to pursue these days? The smart money is getting more optimistic. The number of long hedge fund bets moved up by 1 recently. Our calculations also showed that TLRA isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
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.

Richard Driehaus

Unlike other investors who track every movement of the 25 largest hedge funds, our long-short investment strategy relies on hedge fund buy/sell signals given by the 100 best performing hedge funds. Let’s take a look at the fresh hedge fund action regarding Telaria, Inc. (NYSE:TLRA).

What does smart money think about Telaria, Inc. (NYSE:TLRA)?

Heading into the third quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in TLRA over the last 16 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

No of Hedge Funds with TLRA Positions

The largest stake in Telaria, Inc. (NYSE:TLRA) was held by Driehaus Capital, which reported holding $14.7 million worth of stock at the end of March. It was followed by Royce & Associates with a $12.5 million position. Other investors bullish on the company included Renaissance Technologies, Stone House Capital, and Manatuck Hill Partners.

As aggregate interest increased, specific money managers have been driving this bullishness. G2 Investment Partners Management, managed by Josh Goldberg, assembled the most outsized position in Telaria, Inc. (NYSE:TLRA). G2 Investment Partners Management had $4.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management and Bruce Kovner’s Caxton Associates LP.

Let’s check out hedge fund activity in other stocks similar to Telaria, Inc. (NYSE:TLRA). We will take a look at AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), Limoneira Company (NASDAQ:LMNR), New Age Beverages Corporation (NASDAQ:NBEV), and Civista Bancshares, Inc. (NASDAQ:CIVB). This group of stocks’ market valuations are closest to TLRA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AMAG 17 145204 -2
LMNR 2 513 0
NBEV 4 2369 -4
CIVB 4 24223 -1
Average 6.75 43077 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $67 million in TLRA’s case. AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) is the most popular stock in this table. On the other hand Limoneira Company (NASDAQ:LMNR) is the least popular one with only 2 bullish hedge fund positions. Telaria, Inc. (NYSE:TLRA) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately TLRA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TLRA were disappointed as the stock returned -8.1% during the third quarter 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 many of these stocks already outperformed the market so far this year.

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