Is THRM A Good Stock To Buy Now?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Gentherm Inc (NASDAQ:THRM) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is THRM a good stock to buy now? Gentherm Inc (NASDAQ:THRM) investors should be aware of a decrease in hedge fund sentiment in recent months. Gentherm Inc (NASDAQ:THRM) was in 10 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 22. There were 13 hedge funds in our database with THRM holdings at the end of June. Our calculations also showed that THRM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

At the moment there are a large number of signals market participants employ to analyze publicly traded companies. A couple of the most useful signals are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can beat their index-focused peers by a very impressive amount (see the details here).

Matthew Hulsizer PEAK6 Capital

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to analyze the latest hedge fund action regarding Gentherm Inc (NASDAQ:THRM).

Do Hedge Funds Think THRM Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from the previous quarter. The graph below displays the number of hedge funds with bullish position in THRM over the last 21 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Is THRM A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Douglas T. Granat’s Trigran Investments has the biggest position in Gentherm Inc (NASDAQ:THRM), worth close to $40.8 million, corresponding to 7.4% of its total 13F portfolio. Sitting at the No. 2 spot is Marshall Wace LLP, led by Paul Marshall and Ian Wace, holding a $11 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Richard S. Meisenberg’s ACK Asset Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Trigran Investments allocated the biggest weight to Gentherm Inc (NASDAQ:THRM), around 7.38% of its 13F portfolio. ACK Asset Management is also relatively very bullish on the stock, dishing out 4.3 percent of its 13F equity portfolio to THRM.

Due to the fact that Gentherm Inc (NASDAQ:THRM) has witnessed falling interest from hedge fund managers, we can see that there were a few hedgies who sold off their positions entirely last quarter. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management sold off the largest position of the “upper crust” of funds followed by Insider Monkey, comprising about $1.3 million in stock. James Dondero’s fund, Highland Capital Management, also dumped its stock, about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Gentherm Inc (NASDAQ:THRM) but similarly valued. We will take a look at American Woodmark Corporation (NASDAQ:AMWD), BancFirst Corporation (NASDAQ:BANF), Sirius International Insurance Group, Ltd. (NASDAQ:SG), Gray Television, Inc. (NYSE:GTN), Sangamo Therapeutics, Inc. (NASDAQ:SGMO), So-Young International Inc. (NASDAQ:SY), and Apollo Commercial Real Est. Finance Inc (NYSE:ARI). This group of stocks’ market valuations are similar to THRM’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AMWD 15 42220 -1
BANF 4 3383 -9
SG 6 8559 4
GTN 25 114310 -1
SGMO 28 122664 6
SY 7 15987 0
ARI 14 32597 4
Average 14.1 48531 0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.1 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $78 million in THRM’s case. Sangamo Therapeutics, Inc. (NASDAQ:SGMO) is the most popular stock in this table. On the other hand BancFirst Corporation (NASDAQ:BANF) is the least popular one with only 4 bullish hedge fund positions. Gentherm Inc (NASDAQ:THRM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for THRM is 28.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on THRM as the stock returned 51.2% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

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