Thor Industries, Inc. (THO): Hedge Fund Sentiment At All Time Low

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the second quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Thor Industries, Inc. (NYSE:THO).

Is Thor Industries, Inc. (NYSE:THO) a buy right now? Prominent investors are in a bearish mood. The number of bullish hedge fund bets shrunk by 1 in recent months. Our calculations also showed that THO isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 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.

Chuck Royce

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s check out the recent hedge fund action surrounding Thor Industries, Inc. (NYSE:THO).

Hedge fund activity in Thor Industries, Inc. (NYSE:THO)

At Q2’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in THO over the last 16 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with THO Positions

Among these funds, Renaissance Technologies held the most valuable stake in Thor Industries, Inc. (NYSE:THO), which was worth $24.1 million at the end of the second quarter. On the second spot was Ancient Art (Teton Capital) which amassed $19.4 million worth of shares. Moreover, Citadel Investment Group, Royce & Associates, and Millennium Management were also bullish on Thor Industries, Inc. (NYSE:THO), allocating a large percentage of their portfolios to this stock.

Because Thor Industries, Inc. (NYSE:THO) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedge funds who sold off their positions entirely by the end of the second quarter. Intriguingly, Clint Carlson’s Carlson Capital dumped the biggest stake of the “upper crust” of funds followed by Insider Monkey, worth an estimated $17.5 million in stock, and Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital was right behind this move, as the fund sold off about $2.8 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds by the end of the second quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Thor Industries, Inc. (NYSE:THO) but similarly valued. These stocks are South Jersey Industries Inc (NYSE:SJI), Watts Water Technologies Inc (NYSE:WTS), ASGN Incorporated (NYSE:ASGN), and Sanderson Farms, Inc. (NASDAQ:SAFM). All of these stocks’ market caps are similar to THO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SJI 13 69668 2
WTS 15 336617 0
ASGN 21 207387 -2
SAFM 20 449367 -1
Average 17.25 265760 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $116 million in THO’s case. ASGN Incorporated (NYSE:ASGN) is the most popular stock in this table. On the other hand South Jersey Industries Inc (NYSE:SJI) is the least popular one with only 13 bullish hedge fund positions. Thor Industries, Inc. (NYSE:THO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately THO wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on THO were disappointed as the stock returned -3.1% during the third quarter 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 many of these stocks already outperformed the market so far this year.

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