Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Trimble Inc. (NASDAQ:TRMB), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Trimble Inc. (NASDAQ:TRMB) investors should pay attention to an increase in hedge fund sentiment recently. Trimble Inc. (NASDAQ:TRMB) was in 27 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that TRMB isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Minhua Zhang of Weld Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s take a glance at the recent hedge fund action regarding Trimble Inc. (NASDAQ:TRMB).
Do Hedge Funds Think TRMB Is A Good Stock To Buy Now?
At the end of June, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in TRMB over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Impax Asset Management held the most valuable stake in Trimble Inc. (NASDAQ:TRMB), which was worth $707.6 million at the end of the second quarter. On the second spot was ARK Investment Management which amassed $430.3 million worth of shares. Generation Investment Management, Select Equity Group, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Impax Asset Management allocated the biggest weight to Trimble Inc. (NASDAQ:TRMB), around 3.12% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, earmarking 1.38 percent of its 13F equity portfolio to TRMB.
Consequently, key hedge funds have jumped into Trimble Inc. (NASDAQ:TRMB) headfirst. Bridgewater Associates, managed by Ray Dalio, established the most outsized position in Trimble Inc. (NASDAQ:TRMB). Bridgewater Associates had $5.9 million invested in the company at the end of the quarter. Roger Keith Long’s Otter Creek Management also made a $2.7 million investment in the stock during the quarter. The following funds were also among the new TRMB investors: Matthew Hulsizer’s PEAK6 Capital Management, Minhua Zhang’s Weld Capital Management, and Greg Eisner’s Engineers Gate Manager.
Let’s now review hedge fund activity in other stocks similar to Trimble Inc. (NASDAQ:TRMB). These stocks are Ingersoll Rand Inc. (NYSE:IR), Ameren Corporation (NYSE:AEE), Fox Corporation (NASDAQ:FOX), ZoomInfo Technologies Inc. (NASDAQ:ZI), Logitech International SA (NASDAQ:LOGI), FirstEnergy Corp. (NYSE:FE), and PG&E Corporation (NYSE:PCG). This group of stocks’ market values are closest to TRMB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IR | 31 | 873484 | -4 |
| AEE | 23 | 212535 | 4 |
| FOX | 25 | 590317 | 0 |
| ZI | 35 | 670224 | 11 |
| LOGI | 20 | 526968 | 5 |
| FE | 36 | 1704357 | -15 |
| PCG | 64 | 4663822 | -1 |
| Average | 33.4 | 1320244 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $1320 million. That figure was $1800 million in TRMB’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand Logitech International SA (NASDAQ:LOGI) is the least popular one with only 20 bullish hedge fund positions. Trimble Inc. (NASDAQ:TRMB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TRMB is 40.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on TRMB as the stock returned 3.8% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
