Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of The TJX Companies, Inc. (NYSE:TJX) based on that data.
Is The TJX Companies, Inc. (NYSE:TJX) a safe investment right now? Hedge funds were becoming less hopeful. The number of bullish hedge fund bets were cut by 5 in recent months. The TJX Companies, Inc. (NYSE:TJX) was in 63 hedge funds’ portfolios at the end of March. The all time high for this statistic is 78. Our calculations also showed that TJX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 68 hedge funds in our database with TJX holdings at the end of December.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to check out the fresh hedge fund action encompassing The TJX Companies, Inc. (NYSE:TJX).
Do Hedge Funds Think TJX Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 63 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. On the other hand, there were a total of 69 hedge funds with a bullish position in TJX a year ago. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, Alkeon Capital Management held the most valuable stake in The TJX Companies, Inc. (NYSE:TJX), which was worth $404.4 million at the end of the fourth quarter. On the second spot was Holocene Advisors which amassed $287 million worth of shares. D E Shaw, BlueSpruce Investments, and Two Sigma Advisors 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 Broad Bay Capital allocated the biggest weight to The TJX Companies, Inc. (NYSE:TJX), around 12.82% of its 13F portfolio. Rip Road Capital is also relatively very bullish on the stock, dishing out 6.74 percent of its 13F equity portfolio to TJX.
Judging by the fact that The TJX Companies, Inc. (NYSE:TJX) has witnessed falling interest from hedge fund managers, we can see that there were a few hedgies that slashed their positions entirely in the first quarter. Intriguingly, Philippe Laffont’s Coatue Management said goodbye to the biggest investment of all the hedgies watched by Insider Monkey, comprising close to $65.8 million in stock, and Alexander Mitchell’s Scopus Asset Management was right behind this move, as the fund dropped about $53.8 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 5 funds in the first quarter.
Let’s now review hedge fund activity in other stocks similar to The TJX Companies, Inc. (NYSE:TJX). We will take a look at Snap Inc. (NYSE:SNAP), Prologis Inc (NYSE:PLD), Truist Financial Corporation (NYSE:TFC), The Bank of Nova Scotia (NYSE:BNS), China Petroleum & Chemical Corp (NYSE:SNP), FedEx Corporation (NYSE:FDX), and Zoetis Inc (NYSE:ZTS). All of these stocks’ market caps are similar to TJX’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 42.7 hedge funds with bullish positions and the average amount invested in these stocks was $1683 million. That figure was $2348 million in TJX’s case. Snap Inc. (NYSE:SNAP) is the most popular stock in this table. On the other hand China Petroleum & Chemical Corp (NYSE:SNP) is the least popular one with only 11 bullish hedge fund positions. The TJX Companies, Inc. (NYSE:TJX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TJX is 66.2. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately TJX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TJX were disappointed as the stock returned -0.2% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Disclosure: None. This article was originally published at Insider Monkey.