Is TIG A Good Stock To Buy Now?

At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Trean Insurance Group, Inc. (NASDAQ:TIG) makes for a good investment right now.

Is TIG a good stock to buy now? Prominent investors were betting on the stock. The number of long hedge fund positions moved up by 14 in recent months. Trean Insurance Group, Inc. (NASDAQ:TIG) was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that TIG 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.

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Stuart Zimmer Zimmer Partners

Stuart Zimmer of Zimmer Partners

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

At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14 from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TIG over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Trean Insurance Group, Inc. (NASDAQ:TIG) was held by Zimmer Partners, which reported holding $10.7 million worth of stock at the end of September. It was followed by Alyeska Investment Group with a $8.2 million position. Other investors bullish on the company included Driehaus Capital, Adage Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position BlueMar Capital Management allocated the biggest weight to Trean Insurance Group, Inc. (NASDAQ:TIG), around 0.6% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, dishing out 0.31 percent of its 13F equity portfolio to TIG.

Consequently, some big names have been driving this bullishness. Zimmer Partners, managed by Stuart J. Zimmer, initiated the largest position in Trean Insurance Group, Inc. (NASDAQ:TIG). Zimmer Partners had $10.7 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $8.2 million position during the quarter. The other funds with brand new TIG positions are Richard Driehaus’s Driehaus Capital, Phill Gross and Robert Atchinson’s Adage Capital Management, and Israel Englander’s Millennium Management.

Let’s go over hedge fund activity in other stocks similar to Trean Insurance Group, Inc. (NASDAQ:TIG). We will take a look at Keros Therapeutics, Inc. (NASDAQ:KROS), i3 Verticals, Inc. (NASDAQ:IIIV), Newmark Group, Inc. (NASDAQ:NMRK), Triumph Bancorp Inc (NASDAQ:TBK), Puxin Limited (NYSE:NEW), Forterra, Inc. (NASDAQ:FRTA), and Stock Yards Bancorp, Inc. (NASDAQ:SYBT). This group of stocks’ market caps match TIG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KROS 8 214776 -3
IIIV 18 68722 6
NMRK 19 88996 -5
TBK 5 33554 -2
NEW 7 10525 -1
FRTA 27 128985 14
SYBT 9 10163 1
Average 13.3 79389 1.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $49 million in TIG’s case. Forterra, Inc. (NASDAQ:FRTA) is the most popular stock in this table. On the other hand Triumph Bancorp Inc (NASDAQ:TBK) is the least popular one with only 5 bullish hedge fund positions. Trean Insurance Group, Inc. (NASDAQ:TIG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TIG is 42.7. 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. 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 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 beat the market again by 16.2 percentage points. Unfortunately TIG wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TIG were disappointed as the stock returned -5% since the end of September (through 12/8) 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 many of these stocks already outperformed the market so far this year.

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