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How TransCanada Corporation (USA) (TRP) Stacks Up Against Similarly Valued Stocks

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World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.

Is TransCanada Corporation (USA) (NYSE:TRP) a buy right now? The smart money is actually taking a pessimistic view. The number of bullish hedge fund bets dropped by 4 lately. There were 18 hedge funds in our database with TRP positions at the end of June. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as LyondellBasell Industries NV (NYSE:LYB), Boston Scientific Corporation (NYSE:BSX), and PG&E Corporation (NYSE:PCG) to gather more data points.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

gas, oil, plant, petrochemical, production, pipe, fuel, environmental, station, photography, tower, steel, natural, tank, cloud,

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Keeping this in mind, let’s take a gander at the recent action surrounding TransCanada Corporation (USA) (NYSE:TRP).

Hedge fund activity in TransCanada Corporation (USA) (NYSE:TRP)

At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from the second quarter of 2016. On the other hand, there were a total of 12 hedge funds with a bullish position in TRP at the beginning of this year. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

HedgeFundSentimentChart

Of the funds tracked by Insider Monkey, Millennium Management, led by Israel Englander, holds the biggest position in TransCanada Corporation (USA) (NYSE:TRP). Millennium Management has a $73.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Luminus Management, led by Jonathan Barrett and Paul Segal, which holds a $70.3 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions include Eric Sprott’s Sprott Asset Management, Cliff Asness’s AQR Capital Management and Daniel Bubis’s Tetrem Capital Management. We should note that two of these hedge funds (Luminus Management and Sprott Asset Management) are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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