Thor Industries, Inc. (THO) vs. Hedge Fund Favorites in 2019

Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged in 2019. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 57%. Our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That’s why we weren’t surprised when hedge funds’ top 20 large-cap stock picks generated a return of 41.3% in 2019 and outperformed the broader market benchmark by 10.1 percentage points. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.

Thor Industries, Inc. (NYSE:THO) investors should pay attention to an increase in enthusiasm from smart money lately. THO was in 24 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with THO positions at the end of the previous quarter. Our calculations also showed that THO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings).

If you’d ask most shareholders, hedge funds are seen as underperforming, outdated financial vehicles of the past. While there are over 8000 funds in operation at present, Our experts choose to focus on the crème de la crème of this club, about 750 funds. These investment experts control the lion’s share of all hedge funds’ total asset base, and by paying attention to their finest stock picks, Insider Monkey has formulated a few investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .


Lee Ainslie of Maverick Capital

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock is still extremely cheap despite already gaining 20 percent. Keeping this in mind we’re going to take a gander at the fresh hedge fund action regarding Thor Industries, Inc. (NYSE:THO).

How are hedge funds trading Thor Industries, Inc. (NYSE:THO)?

At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from one quarter earlier. On the other hand, there were a total of 28 hedge funds with a bullish position in THO a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Thor Industries, Inc. (NYSE:THO) was held by Citadel Investment Group, which reported holding $56.6 million worth of stock at the end of September. It was followed by Millennium Management with a $35.9 million position. Other investors bullish on the company included Teton Capital, Renaissance Technologies, and Waratah Capital Advisors. In terms of the portfolio weights assigned to each position Teton Capital allocated the biggest weight to Thor Industries, Inc. (NYSE:THO), around 3.35% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, designating 1.73 percent of its 13F equity portfolio to THO.

Now, some big names were breaking ground themselves. Waratah Capital Advisors, managed by Brad Dunkley and Blair Levinsky, created the most valuable position in Thor Industries, Inc. (NYSE:THO). Waratah Capital Advisors had $13.4 million invested in the company at the end of the quarter. Adam Peterson’s Magnolia Capital Fund also initiated a $12.2 million position during the quarter. The following funds were also among the new THO investors: Ken Heebner’s Capital Growth Management, Matthew Hulsizer’s PEAK6 Capital Management, and Lee Ainslie’s Maverick Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Thor Industries, Inc. (NYSE:THO) but similarly valued. These stocks are Cirrus Logic, Inc. (NASDAQ:CRUS), Liberty Latin America Ltd. (NASDAQ:LILA), Simpson Manufacturing Co, Inc. (NYSE:SSD), and Liberty Latin America Ltd. (NASDAQ:LILAK). This group of stocks’ market valuations are closest to THO’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CRUS 24 373257 1
LILA 13 154267 2
SSD 13 215110 -4
LILAK 20 375106 -2
Average 17.5 279435 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $279 million. That figure was $222 million in THO’s case. Cirrus Logic, Inc. (NASDAQ:CRUS) is the most popular stock in this table. On the other hand Liberty Global PLC LiLAC Class A (NASDAQ:LILA) 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. 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 10.1 percentage points. Hedge funds were also right about betting on THO as the stock returned 46.5% in 2019 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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