Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Triumph Bancorp Inc (TBK) A Good Stock To Buy?

How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Triumph Bancorp Inc (NASDAQ:TBK).

Triumph Bancorp Inc (NASDAQ:TBK) has seen a decrease in hedge fund interest lately. Our calculations also showed that TBK isn’t among the 30 most popular stocks among hedge funds.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.

David Harding

We’re going to take a glance at the new hedge fund action surrounding Triumph Bancorp Inc (NASDAQ:TBK).

Hedge fund activity in Triumph Bancorp Inc (NASDAQ:TBK)

At the end of the fourth quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in TBK a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

TBK_may2019

More specifically, Mendon Capital Advisors was the largest shareholder of Triumph Bancorp Inc (NASDAQ:TBK), with a stake worth $42.8 million reported as of the end of December. Trailing Mendon Capital Advisors was Forest Hill Capital, which amassed a stake valued at $11.7 million. Renaissance Technologies, Citadel Investment Group, and Winton Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

Because Triumph Bancorp Inc (NASDAQ:TBK) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers who sold off their full holdings last quarter. At the top of the heap, Remy Trafelet’s Trafelet Capital said goodbye to the biggest stake of the 700 funds tracked by Insider Monkey, worth an estimated $10.8 million in stock, and Richard Driehaus’s Driehaus Capital was right behind this move, as the fund sold off about $8.9 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Triumph Bancorp Inc (NASDAQ:TBK). These stocks are Fossil Group Inc (NASDAQ:FOSL), Westlake Chemical Partners LP (NYSE:WLKP), FTS International, Inc. (NYSE:FTSI), and Puma Biotechnology Inc (NASDAQ:PBYI). This group of stocks’ market caps resemble TBK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FOSL 18 87459 0
WLKP 1 1898 -2
FTSI 22 86133 1
PBYI 22 247828 0
Average 15.75 105830 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $60 million in TBK’s case. FTS International, Inc. (NYSE:FTSI) is the most popular stock in this table. On the other hand Westlake Chemical Partners LP (NYSE:WLKP) is the least popular one with only 1 bullish hedge fund positions. Triumph Bancorp Inc (NASDAQ:TBK) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately TBK wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); TBK investors were disappointed as the stock returned -3.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...