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 Tennant Company (NYSE:TNC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is TNC a good stock to buy now? Tennant Company (NYSE:TNC) investors should be aware of an increase in hedge fund interest lately. Tennant Company (NYSE:TNC) was in 15 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TNC 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.
To the average investor there are several metrics stock market investors put to use to analyze publicly traded companies. A pair of the most innovative metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the S&P 500 by a solid amount (see the details here).
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. With all of this in mind we’re going to take a glance at the latest hedge fund action surrounding Tennant Company (NYSE:TNC).
Do Hedge Funds Think TNC Is A Good Stock To Buy Now?
At the end of September, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the second quarter of 2020. By comparison, 11 hedge funds held shares or bullish call options in TNC a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the number one position in Tennant Company (NYSE:TNC), worth close to $36 million, amounting to 0.4% of its total 13F portfolio. The second largest stake is held by GAMCO Investors, managed by Mario Gabelli, which holds a $21.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions contain Israel Englander’s Millennium Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and James Chen’s Ovata Capital Management. In terms of the portfolio weights assigned to each position Ovata Capital Management allocated the biggest weight to Tennant Company (NYSE:TNC), around 0.59% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.39 percent of its 13F equity portfolio to TNC.
Now, some big names have been driving this bullishness. Renaissance Technologies, established the biggest position in Tennant Company (NYSE:TNC). Renaissance Technologies had $1 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $0.9 million position during the quarter. The other funds with brand new TNC positions are Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Tennant Company (NYSE:TNC) but similarly valued. These stocks are Stoke Therapeutics, Inc. (NASDAQ:STOK), Arcus Biosciences, Inc. (NYSE:RCUS), Athenex, Inc. (NASDAQ:ATNX), Applied Molecular Transport Inc. (NASDAQ:AMTI), Amerisafe, Inc. (NASDAQ:AMSF), Upland Software Inc (NASDAQ:UPLD), and Surgery Partners, Inc. (NASDAQ:SGRY). All of these stocks’ market caps resemble TNC’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $78 million in TNC’s case. Arcus Biosciences, Inc. (NYSE:RCUS) is the most popular stock in this table. On the other hand Applied Molecular Transport Inc. (NASDAQ:AMTI) is the least popular one with only 2 bullish hedge fund positions. Tennant Company (NYSE:TNC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TNC is 67.1. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on TNC as the stock returned 16.5% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.