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Here’s What Hedge Funds Think About TCF Financial Corporation (TCF)

Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2019. What do these smart investors think about TCF Financial Corporation (NYSE:TCF)?

TCF Financial Corporation (NYSE:TCF) was in 22 hedge funds’ portfolios at the end of the first quarter of 2019. TCF shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. There were 23 hedge funds in our database with TCF holdings at the end of the previous quarter. Our calculations also showed that TCF isn’t among the 30 most popular stocks among hedge funds.

According to most market participants, hedge funds are viewed as slow, old investment tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, Our experts look at the moguls of this club, approximately 750 funds. These money managers direct the majority of the smart money’s total capital, and by keeping an eye on their inimitable picks, Insider Monkey has spotted numerous investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.

Matthew Lindenbaum Basswood Capital

Let’s analyze the key hedge fund action regarding TCF Financial Corporation (NYSE:TCF).

How are hedge funds trading TCF Financial Corporation (NYSE:TCF)?

At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TCF over the last 15 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

TCF_june2019

Among these funds, Citadel Investment Group held the most valuable stake in TCF Financial Corporation (NYSE:TCF), which was worth $53.7 million at the end of the first quarter. On the second spot was Arrowstreet Capital which amassed $37.7 million worth of shares. Moreover, Pzena Investment Management, AQR Capital Management, and Water Island Capital were also bullish on TCF Financial Corporation (NYSE:TCF), allocating a large percentage of their portfolios to this stock.

Because TCF Financial Corporation (NYSE:TCF) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies that elected to cut their full holdings heading into Q3. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dumped the biggest position of all the hedgies followed by Insider Monkey, comprising an estimated $29.9 million in stock, and Ravi Chopra’s Azora Capital was right behind this move, as the fund sold off about $22.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q3.

Let’s go over hedge fund activity in other stocks similar to TCF Financial Corporation (NYSE:TCF). We will take a look at Semtech Corporation (NASDAQ:SMTC), Glacier Bancorp, Inc. (NASDAQ:GBCI), Extended Stay America Inc (NASDAQ:STAY), and United States Steel Corporation (NYSE:X). All of these stocks’ market caps are closest to TCF’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SMTC 19 139258 0
GBCI 12 57597 2
STAY 32 522804 0
X 24 214659 0
Average 21.75 233580 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $234 million. That figure was $245 million in TCF’s case. Extended Stay America Inc (NASDAQ:STAY) is the most popular stock in this table. On the other hand Glacier Bancorp, Inc. (NASDAQ:GBCI) is the least popular one with only 12 bullish hedge fund positions. TCF Financial Corporation (NYSE:TCF) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately TCF wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TCF were disappointed as the stock returned -5.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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

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