In this article we will take a look at whether hedge funds think Titan International Inc (NYSE:TWI) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Titan International Inc (NYSE:TWI) a healthy stock for your portfolio? Money managers are taking a bearish view. The number of long hedge fund bets fell by 4 recently. Our calculations also showed that TWI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). TWI was in 7 hedge funds' portfolios at the end of March. There were 11 hedge funds in our database with TWI positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are perceived as slow, outdated financial tools of years past. While there are more than 8000 funds in operation at the moment, Our researchers look at the masters of this group, about 850 funds. These investment experts handle most of all hedge funds' total capital, and by paying attention to their best picks, Insider Monkey has identified many investment strategies that have historically beaten the market. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to view the key hedge fund action regarding Titan International Inc (NYSE:TWI).
What does smart money think about Titan International Inc (NYSE:TWI)?
Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -36% from the fourth quarter of 2019. By comparison, 13 hedge funds held shares or bullish call options in TWI a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Is TWI A Good Stock To Buy?
When looking at the institutional investors followed by Insider Monkey, Mark Rachesky's MHR Fund Management has the biggest position in Titan International Inc (NYSE:TWI), worth close to $12.4 million, corresponding to 1.9% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, holding a $5.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism encompass Peter Schliemann's Rutabaga Capital Management, D. E. Shaw's D E Shaw and Chuck Royce's Royce & Associates. In terms of the portfolio weights assigned to each position MHR Fund Management allocated the biggest weight to Titan International Inc (NYSE:TWI), around 1.88% of its 13F portfolio. Rutabaga Capital Management is also relatively very bullish on the stock, setting aside 1.84 percent of its 13F equity portfolio to TWI.
Judging by the fact that Titan International Inc (NYSE:TWI) has experienced falling interest from the smart money, we can see that there is a sect of hedgies who sold off their entire stakes heading into Q4. At the top of the heap, Israel Englander's Millennium Management cut the largest position of all the hedgies monitored by Insider Monkey, worth close to $2.4 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital was right behind this move, as the fund dumped about $0.2 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks similar to Titan International Inc (NYSE:TWI). We will take a look at Asure Software Inc (NASDAQ:ASUR), Denbury Resources Inc. (NYSE:DNR), Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL), and AcelRx Pharmaceuticals Inc (NASDAQ:ACRX). This group of stocks' market caps are similar to TWI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ASUR,9,17525,0 DNR,8,486,-4 PANL,2,59,0 ACRX,3,1008,-4 Average,5.5,4770,-2 [/table]
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $23 million in TWI's case. Asure Software Inc (NASDAQ:ASUR) is the most popular stock in this table. On the other hand Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL) is the least popular one with only 2 bullish hedge fund positions. Titan International Inc (NYSE:TWI) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately TWI wasn't nearly as popular as these 10 stocks and hedge funds that were betting on TWI were disappointed as the stock returned 17.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
