Is TCP Capital Corp (TCPC) A Good Stock to Buy?

Since TCP Capital Corp (NASDAQ:TCPC) has experienced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds who were dropping their full holdings in the third quarter. At the top of the heap, Millennium Management, one of the 10 largest hedge funds in the world, sold off the biggest investment of all the hedgies tracked by Insider Monkey, comprising an estimated $1.1 million in stock. John Fichthorn’s fund, Dialectic Capital Management, also said goodbye to its stock, about $0.7 million worth.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as TCP Capital Corp (NASDAQ:TCPC) but similarly valued. These stocks are Ambac Financial Group, Inc. (NASDAQ:AMBC), Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA), Asanko Gold Inc (NYSEAMEX:AKG), and Barnes & Noble, Inc. (NYSE:BKS). This group of stocks’ market values are closest to TCPC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AMBC 21 178704 1
MNTA 13 136273 2
AKG 8 87646 0
BKS 15 153873 -6

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $139 million. That figure was $8 million in TCPC’s case. Ambac Financial Group, Inc. (NASDAQ:AMBC) is the most popular stock in this table. On the other hand Asanko Gold Inc (NYSEAMEX:AKG) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks TCP Capital Corp (NASDAQ:TCPC) is even less popular than AKG. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.

Disclosure: None