Hedge Funds Never Been Less Bullish On TETRA Technologies, Inc. (TTI)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded TETRA Technologies, Inc. (NYSE:TTI) based on those filings.

TETRA Technologies, Inc. (NYSE:TTI) was in 6 hedge funds’ portfolios at the end of March. TTI shareholders have witnessed a decrease in hedge fund sentiment recently. There were 9 hedge funds in our database with TTI holdings at the end of the previous quarter. Our calculations also showed that TTI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

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

In the 21st century investor’s toolkit there are plenty of metrics stock market investors can use to evaluate stocks. A couple of the most under-the-radar metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best fund managers can outperform the broader indices by a solid amount (see the details here).

Chuck Royce

Chuck Royce of Royce & Associates

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the key hedge fund action regarding TETRA Technologies, Inc. (NYSE:TTI).

What does smart money think about TETRA Technologies, Inc. (NYSE:TTI)?

At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the previous quarter. By comparison, 11 hedge funds held shares or bullish call options in TTI 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, Prescott Group Capital Management held the most valuable stake in TETRA Technologies, Inc. (NYSE:TTI), which was worth $1.3 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $0.5 million worth of shares. D E Shaw, Royce & Associates, and Alyeska Investment Group 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 Prescott Group Capital Management allocated the biggest weight to TETRA Technologies, Inc. (NYSE:TTI), around 0.64% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.0044 percent of its 13F equity portfolio to TTI.

Judging by the fact that TETRA Technologies, Inc. (NYSE:TTI) has experienced bearish sentiment from the smart money, it’s easy to see that there was a specific group of hedge funds that decided to sell off their full holdings heading into Q4. Interestingly, Bradley Louis Radoff’s Fondren Management cut the biggest stake of all the hedgies followed by Insider Monkey, comprising an estimated $1.8 million in stock. Joe Huber’s fund, Huber Capital Management, also sold off its stock, about $0.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to TETRA Technologies, Inc. (NYSE:TTI). These stocks are HighPoint Resources Corporation (NYSE:HPR), Frontier Communications Corporation (NASDAQ:FTR), RiceBran Technologies (NASDAQ:RIBT), and Elmira Savings Bank (NASDAQ:ESBK). This group of stocks’ market caps resemble TTI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HPR 10 3579 -3
FTR 8 3101 2
RIBT 5 3378 -1
ESBK 1 157 0
Average 6 2554 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $2 million in TTI’s case. HighPoint Resources Corporation (NYSE:HPR) is the most popular stock in this table. On the other hand Elmira Savings Bank (NASDAQ:ESBK) is the least popular one with only 1 bullish hedge fund positions. TETRA Technologies, Inc. (NYSE:TTI) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on TTI as the stock returned 77% during the second quarter and outperformed the market by an even larger margin.

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