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 General Mills, Inc. (NYSE:GIS).
General Mills, Inc. (NYSE:GIS) has seen an increase in support from the world's most elite money managers of late. Our calculations also showed that GIS 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). Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 51 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_25981" align="aligncenter" width="393"] Paul Tudor Jones of Tudor Investment Corp[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. 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 take a peek at the fresh hedge fund action regarding General Mills, Inc. (NYSE:GIS).
What have hedge funds been doing with General Mills, Inc. (NYSE:GIS)?
At the end of the first quarter, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GIS over the last 18 quarters. With the smart money's capital changing hands, there exists an "upper tier" of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in General Mills, Inc. (NYSE:GIS), which was worth $252.1 million at the end of the third quarter. On the second spot was D E Shaw which amassed $101.4 million worth of shares. AQR Capital Management, Two Sigma Advisors, and GAMCO Investors 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 Wallace Capital Management allocated the biggest weight to General Mills, Inc. (NYSE:GIS), around 2.66% of its 13F portfolio. Beech Hill Partners is also relatively very bullish on the stock, setting aside 2.09 percent of its 13F equity portfolio to GIS.
As one would reasonably expect, key money managers were leading the bulls' herd. Bridgewater Associates, managed by Ray Dalio, established the biggest position in General Mills, Inc. (NYSE:GIS). Bridgewater Associates had $1.8 million invested in the company at the end of the quarter. Andrew Kurita's Kettle Hill Capital Management also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Eisner's Engineers Gate Manager, Paul Tudor Jones's Tudor Investment Corp, and Qing Li's Sciencast Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as General Mills, Inc. (NYSE:GIS) but similarly valued. These stocks are Eaton Corporation plc (NYSE:ETN), FedEx Corporation (NYSE:FDX), Xcel Energy Inc (NASDAQ:XEL), and Kinder Morgan Inc (NYSE:KMI). This group of stocks' market caps are closest to GIS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ETN,35,823530,-7 FDX,50,1092300,5 XEL,24,394426,9 KMI,47,947312,7 Average,39,814392,3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $814 million. That figure was $691 million in GIS's case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand Xcel Energy Inc (NASDAQ:XEL) is the least popular one with only 24 bullish hedge fund positions. General Mills, Inc. (NYSE:GIS) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on GIS, though not to the same extent, as the stock returned 20.5% during the second quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.