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Hedge Funds Have Never Been This Bullish On The Toro Company (TTC)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded The Toro Company (NYSE:TTC) and determine whether the smart money was really smart about this stock.

Is The Toro Company (NYSE:TTC) the right pick for your portfolio? Prominent investors were buying. The number of long hedge fund positions improved by 7 in recent months. The Toro Company (NYSE:TTC) was in 31 hedge funds’ portfolios at the end of June. The all time high for this statistics is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TTC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 24 hedge funds in our database with TTC holdings at the end of March.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Today there are tons of formulas stock traders use to analyze stocks. A duo of the best formulas are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the market by a significant amount (see the details here).

CHILTON INVESTMENT COMPANY

Richard Chilton of Chilton Investment Company

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a gander at the fresh hedge fund action regarding The Toro Company (NYSE:TTC).

Hedge fund activity in The Toro Company (NYSE:TTC)

At the end of the second quarter, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from the previous quarter. On the other hand, there were a total of 24 hedge funds with a bullish position in TTC a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Select Equity Group held the most valuable stake in The Toro Company (NYSE:TTC), which was worth $403.6 million at the end of the third quarter. On the second spot was Impax Asset Management which amassed $115.6 million worth of shares. Fisher Asset Management, Chilton Investment Company, and Millennium 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 Select Equity Group allocated the biggest weight to The Toro Company (NYSE:TTC), around 2.32% of its 13F portfolio. Bishop Rock Capital is also relatively very bullish on the stock, setting aside 1.79 percent of its 13F equity portfolio to TTC.

As industrywide interest jumped, some big names were breaking ground themselves. Running Oak Capital, managed by Seth Cogswell, established the biggest position in The Toro Company (NYSE:TTC). Running Oak Capital had $3.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.8 million position during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Anand Parekh’s Alyeska Investment Group, and Ray Dalio’s Bridgewater Associates.

Let’s now review hedge fund activity in other stocks similar to The Toro Company (NYSE:TTC). We will take a look at Lincoln National Corporation (NYSE:LNC), Bill.com Holdings, Inc. (NYSE:BILL), Knight-Swift Transportation Holdings Inc. (NYSE:KNX), Bright Horizons Family Solutions Inc (NYSE:BFAM), Huntington Ingalls Industries Inc (NYSE:HII), Universal Display Corporation (NASDAQ:OLED), and XPO Logistics Inc (NYSE:XPO). This group of stocks’ market values match TTC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LNC 34 493924 8
BILL 52 1196788 30
KNX 39 466487 7
BFAM 30 217350 3
HII 30 272167 9
OLED 25 216895 1
XPO 40 2294370 4
Average 35.7 736854 8.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.7 hedge funds with bullish positions and the average amount invested in these stocks was $737 million. That figure was $703 million in TTC’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Universal Display Corporation (NASDAQ:OLED) is the least popular one with only 25 bullish hedge fund positions. The Toro Company (NYSE:TTC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TTC is 51.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and still beat the market by 17.6 percentage points. A small number of hedge funds were also right about betting on TTC as the stock returned 24.6% since the end of June (through September 14th) and outperformed the market by an even larger margin.

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