We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Taylor Morrison Home Corp (NYSE:TMHC).
Taylor Morrison Home Corp (NYSE:TMHC) was in 12 hedge funds’ portfolios at the end of March. TMHC investors should be aware of a decrease in hedge fund sentiment of late. There were 15 hedge funds in our database with TMHC positions at the end of the previous quarter. Our calculations also showed that TMHC isn’t among the 30 most popular stocks among hedge funds.
Today there are tons of methods stock traders employ to evaluate publicly traded companies. Two of the most underrated methods are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best investment managers can outclass their index-focused peers by a superb amount (see the details here).
Let’s analyze the recent hedge fund action regarding Taylor Morrison Home Corp (NYSE:TMHC).
What have hedge funds been doing with Taylor Morrison Home Corp (NYSE:TMHC)?
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TMHC over the last 15 quarters. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Echo Street Capital Management was the largest shareholder of Taylor Morrison Home Corp (NYSE:TMHC), with a stake worth $50.3 million reported as of the end of March. Trailing Echo Street Capital Management was Greenhaven Associates, which amassed a stake valued at $48.9 million. Polar Capital, Balyasny Asset Management, and Basswood Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Because Taylor Morrison Home Corp (NYSE:TMHC) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that elected to cut their full holdings by the end of the third quarter. Interestingly, John Khoury’s Long Pond Capital dumped the largest position of the 700 funds tracked by Insider Monkey, valued at an estimated $59.1 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also dumped its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Taylor Morrison Home Corp (NYSE:TMHC). These stocks are Atlantica Yield plc (NASDAQ:AY), Inphi Corporation (NYSE:IPHI), Oasis Petroleum Inc. (NYSE:OAS), and BBVA Banco Frances S.A. (NYSE:BFR). This group of stocks’ market caps are similar to TMHC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AY | 21 | 239050 | -1 |
| IPHI | 21 | 164662 | 0 |
| OAS | 27 | 276839 | -4 |
| BFR | 15 | 29497 | 2 |
| Average | 21 | 177512 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $178 million. That figure was $185 million in TMHC’s case. Oasis Petroleum Inc. (NYSE:OAS) is the most popular stock in this table. On the other hand BBVA Banco Frances S.A. (NYSE:BFR) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Taylor Morrison Home Corp (NYSE:TMHC) is even less popular than BFR. Hedge funds clearly dropped the ball on TMHC 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on TMHC as the stock returned 13.2% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
