TELUS Corporation (TU): Are Hedge Funds Right About This Stock?

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We at Insider Monkey have gone over 866 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 March 31st. In this article, we look at what those funds think of TELUS Corporation (NYSE:TU) based on that data.

TELUS Corporation (NYSE:TU) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic is 20. TU has seen an increase in enthusiasm from smart money recently. There were 14 hedge funds in our database with TU positions at the end of the fourth quarter. Our calculations also showed that TU isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the eyes of most shareholders, hedge funds are assumed to be slow, outdated financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, Our experts look at the bigwigs of this club, around 850 funds. Most estimates calculate that this group of people have their hands on bulk of the hedge fund industry’s total asset base, and by observing their highest performing investments, Insider Monkey has brought to light many investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Robert Richards of Heathbridge Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Keeping this in mind let’s take a glance at the fresh hedge fund action encompassing TELUS Corporation (NYSE:TU).

Do Hedge Funds Think TU Is A Good Stock To Buy Now?

At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TU over the last 23 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of TELUS Corporation (NYSE:TU), with a stake worth $81.3 million reported as of the end of March. Trailing Renaissance Technologies was Heathbridge Capital Management, which amassed a stake valued at $31.1 million. Marshall Wace LLP, Schonfeld Strategic Advisors, and GLG Partners 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 Zeno Research allocated the biggest weight to TELUS Corporation (NYSE:TU), around 9.1% of its 13F portfolio. Heathbridge Capital Management is also relatively very bullish on the stock, earmarking 8.54 percent of its 13F equity portfolio to TU.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Pinz Capital, managed by Matthew L Pinz, initiated the largest position in TELUS Corporation (NYSE:TU). Pinz Capital had $6.5 million invested in the company at the end of the quarter. Felix Wai’s Zeno Research also made a $4.7 million investment in the stock during the quarter. The following funds were also among the new TU investors: John Overdeck and David Siegel’s Two Sigma Advisors, Donald Sussman’s Paloma Partners, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TELUS Corporation (NYSE:TU) but similarly valued. These stocks are Etsy Inc (NASDAQ:ETSY), Garmin Ltd. (NASDAQ:GRMN), Sirius XM Holdings Inc (NASDAQ:SIRI), Seagen Inc. (NASDAQ:SGEN), Telefonica S.A. (NYSE:TEF), Yum China Holdings, Inc. (NYSE:YUMC), and Laboratory Corp. of America Holdings (NYSE:LH). This group of stocks’ market values match TU’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ETSY 53 1645009 -3
GRMN 23 513329 -4
SIRI 24 570460 -8
SGEN 39 7467410 7
TEF 6 4834 1
YUMC 34 975839 -5
LH 54 2476443 -12
Average 33.3 1950475 -3.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.3 hedge funds with bullish positions and the average amount invested in these stocks was $1950 million. That figure was $200 million in TU’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 6 bullish hedge fund positions. TELUS Corporation (NYSE:TU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TU is 48.5. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd and beat the market by 10.1 percentage points. A small number of hedge funds were also right about betting on TU, though not to the same extent, as the stock returned 11.7% since the end of Q1 (through July 23rd) and outperformed the market.

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