Team, Inc. (TISI): Hedge Fund Sentiment Unchanged

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Team, Inc. (NYSE:TISI).

Hedge fund interest in Team, Inc. (NYSE:TISI) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Fidelity Southern Corporation (NASDAQ:LION), Photronics, Inc. (NASDAQ:PLAB), and Master Craft Boat Holdings, Inc. (NASDAQ:MCFT) to gather more data points.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Mario Gabelli of GAMCO Investors

Mario Gabelli of GAMCO Investors

We’re going to take a peek at the fresh hedge fund action surrounding Team, Inc. (NYSE:TISI).

How are hedge funds trading Team, Inc. (NYSE:TISI)?

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, no change from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in TISI heading into this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with TISI Positions

More specifically, Ariel Investments was the largest shareholder of Team, Inc. (NYSE:TISI), with a stake worth $37.5 million reported as of the end of September. Trailing Ariel Investments was GAMCO Investors, which amassed a stake valued at $35.7 million. Royce & Associates, Rutabaga Capital Management, and Hawk Ridge Management were also very fond of the stock, giving the stock large weights in their portfolios.

Seeing as Team, Inc. (NYSE:TISI) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedgies who sold off their positions entirely in the third quarter. At the top of the heap, Richard Driehaus’s Driehaus Capital dropped the largest position of all the hedgies monitored by Insider Monkey, worth an estimated $9 million in stock, and Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management was right behind this move, as the fund dropped about $1.4 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Team, Inc. (NYSE:TISI) but similarly valued. These stocks are Fidelity Southern Corporation (NASDAQ:LION), Photronics, Inc. (NASDAQ:PLAB), Master Craft Boat Holdings, Inc. (NASDAQ:MCFT), and Navigator Holdings Ltd (NYSE:NVGS). This group of stocks’ market values match TISI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LION 9 32687 0
PLAB 14 70199 2
MCFT 22 154523 0
NVGS 8 309367 -2
Average 13.25 141694 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $117 million in TISI’s case. Master Craft Boat Holdings, Inc. (NASDAQ:MCFT) is the most popular stock in this table. On the other hand Navigator Holdings Ltd (NYSE:NVGS) is the least popular one with only 8 bullish hedge fund positions. Team, Inc. (NYSE:TISI) 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 MCFT might be a better candidate to consider a long position.

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