Is TPI Composites, Inc. (TPIC) Going to Burn These Hedge Funds?

Reymerlyn Martin

Updated Tue, Dec 18, 2018, 10:01 PM

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of TPI Composites, Inc. (NASDAQ:TPIC) based on that data.

TPI Composites, Inc. (NASDAQ:TPIC) was in 17 hedge funds' portfolios at the end of September. TPIC shareholders have witnessed an increase in hedge fund interest recently. There were 16 hedge funds in our database with TPIC positions at the end of the previous quarter. Our calculations also showed that TPIC isn't among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

We're going to review the recent hedge fund action encompassing TPI Composites, Inc. (NASDAQ:TPIC).

Hedge fund activity in TPI Composites, Inc. (NASDAQ:TPIC)

At Q3's end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in TPIC over the last 13 quarters. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Douglas T. Granat's Trigran Investments has the biggest position in TPI Composites, Inc. (NASDAQ:TPIC), worth close to $33.6 million, corresponding to 7% of its total 13F portfolio. On Trigran Investments's heels is ACK Asset Management, led by Richard S. Meisenberg, holding a $9.3 million position; 2.5% of its 13F portfolio is allocated to the company. Other peers that hold long positions contain Richard Driehaus's Driehaus Capital, Jim Simons's Renaissance Technologies and Till Bechtolsheimer's Arosa Capital Management.

As aggregate interest increased, key hedge funds were leading the bulls' herd. ACK Asset Management, managed by Richard S. Meisenberg, established the most valuable position in TPI Composites, Inc. (NASDAQ:TPIC). ACK Asset Management had $9.3 million invested in the company at the end of the quarter. David Brown's Hawk Ridge Management also initiated a $1 million position during the quarter. The following funds were also among the new TPIC investors: Warren Lammert's Granite Point Capital, Mark Broach's Manatuck Hill Partners, and David Costen Haley's HBK Investments.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as TPI Composites, Inc. (NASDAQ:TPIC) but similarly valued. These stocks are Associated Capital Group, Inc. (NYSE:AC), MTS Systems Corporation (NASDAQ:MTSC), PBF Logistics LP (NYSE:PBFX), and Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT). This group of stocks' market valuations are similar to TPIC's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AC,4,73364,0 MTSC,12,120562,-1 PBFX,1,2187,-2 RCKT,16,247101,-1 Average,8.25,110804,-1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $90 million in TPIC's case. Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) is the most popular stock in this table. On the other hand PBF Logistics LP (NYSE:PBFX) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks TPI Composites, Inc. (NASDAQ:TPIC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None. This article was originally published at Insider Monkey.

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