Hedge Funds Have Never Been This Bullish On Terreno Realty Corporation (TRNO)

Will the new coronavirus cause a recession in US in the next 6 months? On February 27th, we put the probability at 75% and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Terreno Realty Corporation (NYSE:TRNO).

Is Terreno Realty Corporation (NYSE:TRNO) a good investment today? The smart money is betting on the stock. The number of bullish hedge fund positions inched up by 3 recently. Our calculations also showed that TRNO isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).

If you’d ask most stock holders, hedge funds are perceived as worthless, outdated financial tools of the past. While there are more than 8000 funds trading at present, We look at the masters of this club, around 850 funds. These money managers have their hands on the lion’s share of all hedge funds’ total asset base, and by tracking their first-class equity investments, Insider Monkey has uncovered various investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a gander at the fresh hedge fund action regarding Terreno Realty Corporation (NYSE:TRNO).

What have hedge funds been doing with Terreno Realty Corporation (NYSE:TRNO)?

At Q4’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TRNO over the last 18 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

Among these funds, Millennium Management held the most valuable stake in Terreno Realty Corporation (NYSE:TRNO), which was worth $11.3 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $7.7 million worth of shares. Two Sigma Advisors, Renaissance Technologies, and Winton Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Qtron Investments allocated the biggest weight to Terreno Realty Corporation (NYSE:TRNO), around 0.13% of its 13F portfolio. Stevens Capital Management is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to TRNO.

Now, key hedge funds have jumped into Terreno Realty Corporation (NYSE:TRNO) headfirst. Centiva Capital, managed by Karim Abbadi and Edward McBride, initiated the biggest position in Terreno Realty Corporation (NYSE:TRNO). Centiva Capital had $0.6 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $0.4 million investment in the stock during the quarter. The other funds with brand new TRNO positions are Donald Sussman’s Paloma Partners, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Terreno Realty Corporation (NYSE:TRNO) but similarly valued. These stocks are Tegna Inc (NYSE:TGNA), The Goodyear Tire & Rubber Company (NASDAQ:GT), Steven Madden, Ltd. (NASDAQ:SHOO), and NorthWestern Corporation (NYSE:NWE). All of these stocks’ market caps are closest to TRNO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TGNA 19 400244 1
GT 32 573619 5
SHOO 22 84910 2
NWE 19 167358 2
Average 23 306533 2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $307 million. That figure was $32 million in TRNO’s case. The Goodyear Tire & Rubber Company (NASDAQ:GT) is the most popular stock in this table. On the other hand Tegna Inc (NYSE:TGNA) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Terreno Realty Corporation (NYSE:TRNO) is even less popular than TGNA. Hedge funds clearly dropped the ball on TRNO as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on TRNO as the stock returned -12.9% during the same time period and outperformed the market by an even larger margin.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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