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Hedge Funds Are Crazy About National Beverage Corp. (FIZZ)

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  • FIZZ

In this article you are going to find out whether hedge funds think National Beverage Corp. (NASDAQ:FIZZ) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

National Beverage Corp. (NASDAQ:FIZZ) investors should be aware of an increase in enthusiasm from smart money in recent months. National Beverage Corp. (NASDAQ:FIZZ) was in 21 hedge funds' portfolios at the end of June. The all time high for this statistic is 25. Our calculations also showed that FIZZ isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.

Billionaire Ken Griffin's Top 10 Stocks Holdings
Billionaire Ken Griffin's Top 10 Stocks Holdings

Ken Griffin of Citadel Investment Group

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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. With all of this in mind let's view the fresh hedge fund action encompassing National Beverage Corp. (NASDAQ:FIZZ).

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

Heading into the third quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FIZZ over the last 24 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is FIZZ A Good Stock To Buy?
Is FIZZ A Good Stock To Buy?

More specifically, Renaissance Technologies was the largest shareholder of National Beverage Corp. (NASDAQ:FIZZ), with a stake worth $207.1 million reported as of the end of June. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $9.9 million. Citadel Investment Group, Bridgewater Associates, and Winton Capital Management 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 Winton Capital Management allocated the biggest weight to National Beverage Corp. (NASDAQ:FIZZ), around 0.34% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.26 percent of its 13F equity portfolio to FIZZ.

Consequently, some big names have jumped into National Beverage Corp. (NASDAQ:FIZZ) headfirst. D E Shaw, managed by D. E. Shaw, assembled the most outsized position in National Beverage Corp. (NASDAQ:FIZZ). D E Shaw had $6.2 million invested in the company at the end of the quarter. Brandon Haley's Holocene Advisors also made a $2.2 million investment in the stock during the quarter. The following funds were also among the new FIZZ investors: Paul Tudor Jones's Tudor Investment Corp, Bruce Kovner's Caxton Associates LP, and Peter Algert's Algert Global.

Let's check out hedge fund activity in other stocks similar to National Beverage Corp. (NASDAQ:FIZZ). These stocks are MACOM Technology Solutions Holdings Inc (NASDAQ:MTSI), Sonos, Inc. (NASDAQ:SONO), ACI Worldwide Inc (NASDAQ:ACIW), Alignment Healthcare, Inc. (NASDAQ:ALHC), ICU Medical, Inc. (NASDAQ:ICUI), Tenable Holdings, Inc. (NASDAQ:TENB), and Magnite Inc. (NASDAQ:MGNI). This group of stocks' market values are similar to FIZZ's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MTSI,24,193369,-6 SONO,47,666961,1 ACIW,26,658955,3 ALHC,4,26081,-13 ICUI,27,324811,1 TENB,33,629836,1 MGNI,29,260767,4 Average,27.1,394397,-1.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $394 million. That figure was $260 million in FIZZ's case. Sonos, Inc. (NASDAQ:SONO) is the most popular stock in this table. On the other hand Alignment Healthcare, Inc. (NASDAQ:ALHC) is the least popular one with only 4 bullish hedge fund positions. National Beverage Corp. (NASDAQ:FIZZ) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FIZZ is 55. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on FIZZ as the stock returned 20.5% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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