Is Travelers Companies Inc (TRV) Going to Burn These Hedge Funds?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Travelers Companies Inc (NYSE:TRV) based on that data.

Travelers Companies Inc (NYSE:TRV) has experienced a decrease in hedge fund interest lately. Travelers Companies Inc (NYSE:TRV) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 39. Our calculations also showed that TRV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Ken Griffin of Citadel Investment Group

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a look at the latest hedge fund action encompassing Travelers Companies Inc (NYSE:TRV).

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

At the end of September, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in TRV over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is TRV A Good Stock To Buy?

More specifically, AQR Capital Management was the largest shareholder of Travelers Companies Inc (NYSE:TRV), with a stake worth $194.6 million reported as of the end of September. Trailing AQR Capital Management was Polar Capital, which amassed a stake valued at $106.3 million. Arrowstreet Capital, Millennium Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Te Ahumairangi Investment Management allocated the biggest weight to Travelers Companies Inc (NYSE:TRV), around 0.96% of its 13F portfolio. Sciencast Management is also relatively very bullish on the stock, dishing out 0.48 percent of its 13F equity portfolio to TRV.

Since Travelers Companies Inc (NYSE:TRV) has faced falling interest from the smart money, we can see that there were a few money managers who were dropping their full holdings last quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the largest investment of all the hedgies monitored by Insider Monkey, totaling about $33.5 million in stock, and Sander Gerber’s Hudson Bay Capital Management was right behind this move, as the fund cut about $7.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Travelers Companies Inc (NYSE:TRV) but similarly valued. We will take a look at Kinder Morgan Inc (NYSE:KMI), The Allstate Corporation (NYSE:ALL), DiDi Global Inc. (NYSE:DIDI), Manulife Financial Corporation (NYSE:MFC), Xilinx, Inc. (NASDAQ:XLNX), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), and Banco Bradesco SA (NYSE:BBD). This group of stocks’ market values are similar to TRV’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KMI 43 1012275 5
ALL 27 821166 -6
DIDI 15 701653 -31
MFC 18 351002 0
XLNX 62 4541236 3
ERIC 21 227446 2
BBD 13 228299 -5
Average 28.4 1126154 -4.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $1126 million. That figure was $433 million in TRV’s case. Xilinx, Inc. (NASDAQ:XLNX) is the most popular stock in this table. On the other hand Banco Bradesco SA (NYSE:BBD) is the least popular one with only 13 bullish hedge fund positions. Travelers Companies Inc (NYSE:TRV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TRV is 47. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately TRV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TRV were disappointed as the stock returned -3.3% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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