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Is TriMas Corporation (TRS) Going To Burn These Hedge Funds ?

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 at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of TriMas Corporation (NASDAQ:TRS).

Is TriMas Corporation (NASDAQ:TRS) a splendid stock to buy now? Investors who are in the know are in a pessimistic mood. The number of long hedge fund positions fell by 1 recently. Our calculations also showed that TRS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). TRS was in 14 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with TRS holdings at the end of the previous quarter.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ric Dillon Diamond Hill Capital

Ric Dillon of Diamond Hill Capital

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the recent hedge fund action regarding TriMas Corporation (NASDAQ:TRS).

What does smart money think about TriMas Corporation (NASDAQ:TRS)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the previous quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in TRS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Pzena Investment Management held the most valuable stake in TriMas Corporation (NASDAQ:TRS), which was worth $47.9 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $17.2 million worth of shares. Royce & Associates, Barington Capital Group, and Diamond Hill Capital 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 Barington Capital Group allocated the biggest weight to TriMas Corporation (NASDAQ:TRS), around 11.34% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 0.65 percent of its 13F equity portfolio to TRS.

Due to the fact that TriMas Corporation (NASDAQ:TRS) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of fund managers that decided to sell off their full holdings last quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group sold off the largest stake of all the hedgies tracked by Insider Monkey, comprising about $1 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also said goodbye to its stock, about $0.5 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to TriMas Corporation (NASDAQ:TRS). We will take a look at Employers Holdings, Inc. (NYSE:EIG), Marcus & Millichap Inc (NYSE:MMI), Oi SA (NYSE:OIBR), and Monmouth Real Estate Investment Corporation (NYSE:MNR). This group of stocks’ market caps are similar to TRS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EIG 14 76306 -2
MMI 14 111080 2
OIBR 11 291042 -7
MNR 10 73788 -3
Average 12.25 138054 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $111 million in TRS’s case. Employers Holdings, Inc. (NYSE:EIG) is the most popular stock in this table. On the other hand Monmouth Real Estate Investment Corporation (NYSE:MNR) is the least popular one with only 10 bullish hedge fund positions. TriMas Corporation (NASDAQ:TRS) is not the most popular stock in this group but hedge fund interest is still above average. 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately TRS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TRS were disappointed as the stock returned 1.1% during the fourth quarter (through the end of November) 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.

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

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