Is Tutor Perini Corp (TPC) A Good Stock To Buy?

Abigail Fisher

Sat, Jun 29, 2019, 8:09 PM

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Tutor Perini Corp (NYSE:TPC).

Is Tutor Perini Corp (NYSE:TPC) a healthy stock for your portfolio? The best stock pickers are getting more optimistic. The number of bullish hedge fund bets increased by 5 recently. Our calculations also showed that TPC isn't among the 30 most popular stocks among hedge funds.

If you'd ask most investors, hedge funds are viewed as underperforming, outdated investment tools of the past. While there are greater than 8000 funds in operation at present, Our researchers choose to focus on the moguls of this club, approximately 750 funds. These money managers manage bulk of the hedge fund industry's total capital, and by following their unrivaled stock picks, Insider Monkey has deciphered numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).

We're going to take a glance at the recent hedge fund action regarding Tutor Perini Corp (NYSE:TPC).

Hedge fund activity in Tutor Perini Corp (NYSE:TPC)

Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 71% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in TPC a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Grossman and Glen Schneider's SG Capital Management has the most valuable position in Tutor Perini Corp (NYSE:TPC), worth close to $9.3 million, corresponding to 1.7% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $3.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions comprise John Overdeck and David Siegel's Two Sigma Advisors, Paul Tudor Jones's Tudor Investment Corp and Jim Simons's Renaissance Technologies.

As industrywide interest jumped, specific money managers were breaking ground themselves. SG Capital Management, managed by Ken Grossman and Glen Schneider, assembled the most valuable position in Tutor Perini Corp (NYSE:TPC). SG Capital Management had $9.3 million invested in the company at the end of the quarter. Howard Marks's Oaktree Capital Management also initiated a $5.6 million position during the quarter. The other funds with new positions in the stock are Jim Simons's Renaissance Technologies, Roger Ibbotson's Zebra Capital Management, and Cliff Asness's AQR Capital Management.

Let's now take a look at hedge fund activity in other stocks similar to Tutor Perini Corp (NYSE:TPC). We will take a look at Enviva Partners, LP (NYSE:EVA), Natus Medical Inc (NASDAQ:BABY), The Providence Service Corporation (NASDAQ:PRSC), and Cerus Corporation (NASDAQ:CERS). This group of stocks' market valuations match TPC's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EVA,7,89870,1 BABY,24,110207,9 PRSC,12,181177,-2 CERS,17,108108,2 Average,15,122341,2.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $122 million. That figure was $18 million in TPC's case. Natus Medical Inc (NASDAQ:BABY) is the most popular stock in this table. On the other hand Enviva Partners, LP (NYSE:EVA) is the least popular one with only 7 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TPC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TPC investors were disappointed as the stock returned -24.9% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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

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