With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Terreno Realty Corporation (NYSE:TRNO).
Is TRNO a good stock to buy now? Hedge funds were getting more bullish. The number of bullish hedge fund positions advanced by 6 in recent months. Terreno Realty Corporation (NYSE:TRNO) was in 15 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TRNO 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). There were 9 hedge funds in our database with TRNO positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a large number of tools stock market investors have at their disposal to size up publicly traded companies. Some of the most innovative tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce the S&P 500 by a very impressive margin (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. Keeping this in mind let’s go over the fresh hedge fund action surrounding Terreno Realty Corporation (NYSE:TRNO).
Do Hedge Funds Think TRNO Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TRNO over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Terreno Realty Corporation (NYSE:TRNO), which was worth $10.2 million at the end of the third quarter. On the second spot was Marshall Wace LLP which amassed $5 million worth of shares. D E Shaw, Tudor Investment Corp, and Two Sigma Advisors 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 Tudor Investment Corp allocated the biggest weight to Terreno Realty Corporation (NYSE:TRNO), around 0.17% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to TRNO.
As one would reasonably expect, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most valuable position in Terreno Realty Corporation (NYSE:TRNO). Marshall Wace LLP had $5 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $4 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Donald Sussman’s Paloma Partners, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Terreno Realty Corporation (NYSE:TRNO) but similarly valued. These stocks are NewMarket Corporation (NYSE:NEU), Marriott Vacations Worldwide Corporation (NYSE:VAC), Physicians Realty Trust (NYSE:DOC), Ultrapar Participacoes SA (NYSE:UGP), Shell Midstream Partners LP (NYSE:SHLX), Exponent, Inc. (NASDAQ:EXPO), and Emcor Group Inc (NYSE:EME). All of these stocks’ market caps are closest to TRNO’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $38 million in TRNO’s case. Emcor Group Inc (NYSE:EME) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 6 bullish hedge fund positions. Terreno Realty Corporation (NYSE:TRNO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TRNO is 59.6. 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 negative signal and 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 30.7% in 2020 through December 14th and surpassed the market again by 15.8 percentage points. Unfortunately TRNO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TRNO investors were disappointed as the stock returned 2.6% since the end of September (through 12/14) 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 most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.