We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Springbok Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was PDT Partners).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Terreno Realty Corporation (NYSE:TRNO) but similarly valued. These stocks are PHH Corporation (NYSE:PHH), SkyWest, Inc. (NASDAQ:SKYW), Badger Meter, Inc. (NYSE:BMI), and Irsa Inversiones y Rprsntcins SA (ADR) (NYSE:IRS). This group of stocks’ market caps resemble TRNO’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $121 million, compared to $16 million in TRNO’s case. PHH Corporation (NYSE:PHH) is the most popular stock in this table, while Badger Meter, Inc. (NYSE:BMI) is the least popular one with only 5 bullish hedge fund positions. Terreno Realty Corporation (NYSE:TRNO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PHH might be a better candidate to consider a long position.