What the Most Successful Hedge Funds Think About Tutor Perini Corp (TPC)

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Tutor Perini Corp (NYSE:TPC) was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. TPC shareholders have witnessed an increase in hedge fund sentiment lately. There were 12 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 CONE Midstream Partners LP (NYSE:CNNX), HFF, Inc. (NYSE:HF), and Endologix, Inc. (NASDAQ:ELGX) to get a better sense of its popularity.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

What have hedge funds been doing with Tutor Perini Corp (NYSE:TPC)?

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 8% rise from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TPC over the last 5 quarters, which has been volatile, though within a narrow range. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, William Harnisch’s Peconic Partners LLC has the number one position in Tutor Perini Corp (NYSE:TPC), worth close to $25.6 million, accounting for 3.2% of its total 13F portfolio. Coming in second is Israel Englander’s Millennium Management, with an $8 million position. Other peers with similar optimism encompass Cliff Asness’ AQR Capital Management, Ken Griffin’s Citadel Investment Group, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that Peconic Partners LLC is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Consequently, key hedge funds were leading the bulls’ herd. Millennium Management established the most valuable position in Tutor Perini Corp (NYSE:TPC). Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $1.3 million position during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management, Phil Frohlich’s Prescott Group Capital Management, and Neil Chriss’ Hutchin Hill Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Tutor Perini Corp (NYSE:TPC) but similarly valued. These stocks are CONE Midstream Partners LP (NYSE:CNNX), HFF, Inc. (NYSE:HF), Endologix, Inc. (NASDAQ:ELGX), and PennyMac Mortgage Investment Trust (NYSE:PMT). This group of stocks’ market values match TPC’s market value.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $49 million in TPC’s case. Endologix, Inc. (NASDAQ:ELGX) is the most popular stock in this table. On the other hand CONE Midstream Partners LP (NYSE:CNNX) is the least popular one with only 3 bullish hedge fund positions. Tutor Perini Corp (NYSE:TPC) 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. In this regard ELGX might be a better candidate to consider taking a long position in.

Disclosure: None