Hedge Funds Starting To Cash Out Of Trinseo S.A. (TSE)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Trinseo S.A. (NYSE:TSE).

Trinseo S.A. (NYSE:TSE) has seen a decrease in activity from the world’s largest hedge funds recently. TSE was in 17 hedge funds’ portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with TSE holdings at the end of the previous quarter. Our calculations also showed that TSE 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 today’s marketplace there are tons of methods shareholders can use to size up stocks. Some of the most useful methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outpace the market by a healthy amount (see the details here).

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. With all of this in mind we’re going to take a glance at the recent hedge fund action encompassing Trinseo S.A. (NYSE:TSE).

What does smart money think about Trinseo S.A. (NYSE:TSE)?

At Q1’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards TSE over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the biggest position in Trinseo S.A. (NYSE:TSE). Renaissance Technologies has a $8.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $3.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions comprise David Harding’s Winton Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Proxima Capital Management allocated the biggest weight to Trinseo S.A. (NYSE:TSE), around 12.43% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, earmarking 0.06 percent of its 13F equity portfolio to TSE.

Seeing as Trinseo S.A. (NYSE:TSE) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there was a specific group of fund managers that elected to cut their full holdings last quarter. It’s worth mentioning that Israel Englander’s Millennium Management sold off the largest stake of all the hedgies monitored by Insider Monkey, valued at about $8.4 million in stock. Jonathan Soros’s fund, JS Capital, also dumped its stock, about $0.5 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Trinseo S.A. (NYSE:TSE) but similarly valued. These stocks are Delphi Technologies PLC (NYSE:DLPH), Sculptor Capital Management, Inc. (NYSE:SCU), Xperi Holding  Corporation (NASDAQ:XPER), and Republic Bancorp, Inc.(NASDAQ:RBCAA). This group of stocks’ market values resemble TSE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DLPH 19 105634 2
SCU 12 72077 0
XPER 20 108532 -3
RBCAA 5 8845 -3
Average 14 73772 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $26 million in TSE’s case. Xperi Holding Corporation (NASDAQ:XPER) is the most popular stock in this table. On the other hand Republic Bancorp, Inc.(NASDAQ:RBCAA) is the least popular one with only 5 bullish hedge fund positions. Trinseo S.A. (NYSE:TSE) is not the most popular stock in this group but hedge fund interest is still above 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 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on TSE, though not to the same extent, as the stock returned 25.8% during the first two months and twenty two days of the second quarter and outperformed the market as well.

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