Hedge funds are not perfect. They have their bad picks just like everyone else. Valeant, a stock hedge funds have loved, lost 79% during the last 12 months ending in November 21. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 mid-cap stocks among the best performing hedge funds yielded an average return of 18% in the same time period, vs. a gain of 7.6% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Toro Co (NYSE:TTC).
Toro Co (NYSE:TTC) shareholders have witnessed an increase in hedge fund interest of late, as a net total of 5 more hedge funds owned the stock at the close of September as did on June 30. At the end of this article we will also compare TTC to other stocks including AutoNation, Inc. (NYSE:AN), Acadia Healthcare Company Inc (NASDAQ:ACHC), and National Fuel Gas Co. (NYSE:NFG) to get a better sense of its popularity.
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Hedge fund activity in Toro Co (NYSE:TTC)
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 28% jump from the previous quarter, pushing smart money ownership of the stock back to a yearly high. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the largest position in The Toro Company (NYSE:TTC), worth close to $85 million. Coming in second is Ian Simm of Impax Asset Management, with a $50.3 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish encompass Cliff Asness’ AQR Capital Management, Ric Dillon’s Diamond Hill Capital and John Overdeck and David Siegel’s Two Sigma Advisors.
Consequently, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most outsized position in Toro Co (NYSE:TTC). Millennium Management had $12.5 million invested in the company at the end of the quarter. Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital also made a $4.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Jim Simons’ Renaissance Technologies.
Let’s also examine hedge fund activity in other stocks similar to Toro Co (NYSE:TTC). These stocks are AutoNation, Inc. (NYSE:AN), Acadia Healthcare Company Inc (NASDAQ:ACHC), National Fuel Gas Co. (NYSE:NFG), and Dolby Laboratories, Inc. (NYSE:DLB). All of these stocks’ market caps are similar to TTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AN | 25 | 1167090 | -3 |
| ACHC | 22 | 449275 | 3 |
| NFG | 21 | 256754 | 2 |
| DLB | 24 | 334263 | 0 |
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $552 million. That figure was $271 million in TTC’s case. AutoNation, Inc. (NYSE:AN) is the most popular stock in this table. On the other hand National Fuel Gas Co. (NYSE:NFG) is the least popular one with only 21 bullish hedge fund positions. Toro Co (NYSE:TTC) 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. In this regard AN might be a better candidate to consider a long position in.
Disclosure: None
