Should You Buy Taubman Centers, Inc. (TCO)?

With a general bullishness amongst the heavyweights, specific money managers have jumped into Taubman Centers, Inc. (NYSE:TCO) headfirst. Driehaus Capital, led by Richard Driehaus, initiated the most outsized position in Taubman Centers, Inc. (NYSE:TCO). Driehaus Capital had $4.5 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 new positions in the stock are Ray Dalio’s Bridgewater Associates and Benjamin A. Smith’s Laurion Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Taubman Centers, Inc. (NYSE:TCO) but similarly valued. These stocks are Toll Brothers Inc (NYSE:TOL), Gentex Corporation (NASDAQ:GNTX), IAC/InterActiveCorp (NASDAQ:IAC), and Ares Capital Corporation (NASDAQ:ARCC). This group of stocks’ market valuations match TCO’s market valuation.

As you can see these stocks had an average of 26 funds with bullish positions and the average amount invested in these stocks was $505 million. That figure was $436 million in TCO’s case. IAC/InterActiveCorp (NASDAQ:IAC) is the most popular stock in this table, while Ares Capital Corporation (NASDAQ:ARCC) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Taubman Centers, Inc. (NYSE:TCO) is even less popular than Ares Capital Corporation (NASDAQ:ARCC). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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Disclosure: None