The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Interface, Inc. (NASDAQ:TILE).
Is Interface, Inc. (NASDAQ:TILE) undervalued? Hedge funds were getting less optimistic. The number of bullish hedge fund bets retreated by 2 in recent months. Interface, Inc. (NASDAQ:TILE) was in 17 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 25. Our calculations also showed that TILE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 19 hedge funds in our database with TILE holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind we’re going to check out the latest hedge fund action encompassing Interface, Inc. (NASDAQ:TILE).
Do Hedge Funds Think TILE Is A Good Stock To Buy Now?
At the end of September, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in TILE a year ago. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of Interface, Inc. (NASDAQ:TILE), with a stake worth $4.9 million reported as of the end of September. Trailing D E Shaw was Arrowstreet Capital, which amassed a stake valued at $3.8 million. Renaissance Technologies, Citadel Investment Group, and Royce & Associates 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 Royce & Associates allocated the biggest weight to Interface, Inc. (NASDAQ:TILE), around 0.01% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to TILE.
Because Interface, Inc. (NASDAQ:TILE) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there is a sect of funds that decided to sell off their entire stakes heading into Q4. At the top of the heap, Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the biggest stake of all the hedgies watched by Insider Monkey, totaling an estimated $0.6 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also said goodbye to its stock, about $0.3 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 2 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Interface, Inc. (NASDAQ:TILE) but similarly valued. These stocks are Dorchester Minerals LP (NASDAQ:DMLP), Chatham Lodging Trust (NYSE:CLDT), Village Super Market, Inc. (NASDAQ:VLGEA), Corporacion America Airports SA (NYSE:CAAP), Cellular Biomedicine Group, Inc. (NASDAQ:CBMG), Superior Group of Companies, Inc. (NASDAQ:SGC), and Fortress Biotech Inc (NASDAQ:FBIO). This group of stocks’ market values resemble TILE’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.4 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $17 million in TILE’s case. Chatham Lodging Trust (NYSE:CLDT) is the most popular stock in this table. On the other hand Corporacion America Airports SA (NYSE:CAAP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Interface, Inc. (NASDAQ:TILE) is more popular among hedge funds. Our overall hedge fund sentiment score for TILE is 73.4. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on TILE as the stock returned 47.7% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.