Tutor Perini Corp (TPC): Hedge Fund Ownership Diminishing

At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Tutor Perini Corp (NYSE:TPC) makes for a good investment right now.

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Tutor Perini Corp was in 16 hedge funds’ portfolio at the end of the third quarter of 2015. TPC has experienced a decrease in hedge fund sentiment in recent months. There were 19 hedge funds in our database with TPC positions at the end of the previous quarter. At the end of this article we will also compare TPC to other stocks including EarthLink, Inc. (NASDAQ:ELNK), Aceto Corporation (NASDAQ:ACET), and Hanmi Financial Corp (NASDAQ:HAFC) to get a better sense of its popularity.

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If you’d ask most traders, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are greater than 8,000 funds with their doors open at present, experts at hedge fund tracking site Insider Monkey look at the bigwigs of this group, around 700 funds. Most estimates calculate that this group of people have their hands on most of the smart money’s total capital, and by paying attention to their unrivaled picks, Insider Monkey has figured out a few investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in its backtests.

Now, we’re going to go over the latest action surrounding Tutor Perini Corp (NYSE:TPC).

How have hedgies been trading Tutor Perini Corp (NYSE:TPC)?

At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 16% decline from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.

According to hedge fund intelligence website Insider Monkey, William Harnisch’s Peconic Partners LLC has the most valuable position in Tutor Perini Corp (NYSE:TPC), worth close to $15.4 million, accounting for 2.5% of its total 13F portfolio. Coming in second is Pzena Investment Management, led by Richard S. Pzena, holding a $12.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include David Dreman’s Dreman Value Management, Andy Redleaf’s Whitebox Advisors, and Paul J. Isaac’s Arbiter Partners Capital Management.

Seeing as Tutor Perini Corp (NYSE:TPC) has faced a declination in interest from the smart money, we can see that there were a few hedgies who were dropping their positions entirely last quarter. Interestingly, Israel Englander’s Millennium Management sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $1 million in stock. Philip Hempleman’s fund, Ardsley Partners, also cut its stock, about $0.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by three funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Tutor Perini Corp (NYSE:TPC). We will take a look at EarthLink, Inc. (NASDAQ:ELNK), Aceto Corporation (NASDAQ:ACET), Hanmi Financial Corp (NASDAQ:HAFC), and LHC Group, Inc. (NASDAQ:LHCG). All of these stocks’ market caps are closest to TPC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ELNK 23 141218 2
ACET 11 48423 6
HAFC 13 72344 3
LHCG 20 107498 3

As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That bested the mere $53 million in Tutor Perini shares that were held by the investors that we track. EarthLink, Inc. (NASDAQ:ELNK) is the most popular stock in this table. On the other hand Aceto Corporation (NASDAQ:ACET) is the least popular one with only 11 bullish hedge fund positions. Tutor Perini Corp (NYSE:TPC) is not the least popular stock in this group but hedge fund interest is still below average, as is the volume of share ownership. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ELNK might be a better candidate to consider a long position in.