The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards The Hershey Company (NYSE:HSY).
Is The Hershey Company (NYSE:HSY) ready to rally soon? Money managers are taking an optimistic view. The number of bullish hedge fund bets improved by 6 lately. Our calculations also showed that HSY isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). HSY was in 33 hedge funds' portfolios at the end of September. There were 27 hedge funds in our database with HSY positions at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are many tools market participants put to use to grade stocks. A pair of the most underrated tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outperform the market by a superb amount (see the details here).
[caption id="attachment_26092" align="aligncenter" width="600"] Joel Greenblatt of Gotham Asset Management[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to take a peek at the fresh hedge fund action regarding The Hershey Company (NYSE:HSY).
What does smart money think about The Hershey Company (NYSE:HSY)?
Heading into the fourth quarter of 2019, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HSY over the last 17 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in The Hershey Company (NYSE:HSY) was held by Renaissance Technologies, which reported holding $748.4 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $80.1 million position. Other investors bullish on the company included AQR Capital Management, GLG Partners, and Gotham Asset Management. In terms of the portfolio weights assigned to each position Cognios Capital allocated the biggest weight to The Hershey Company (NYSE:HSY), around 0.97% of its portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.63 percent of its 13F equity portfolio to HSY.
Now, key hedge funds were leading the bulls' herd. ExodusPoint Capital, managed by Michael Gelband, initiated the most valuable position in The Hershey Company (NYSE:HSY). ExodusPoint Capital had $7.4 million invested in the company at the end of the quarter. David Costen Haley's HBK Investments also initiated a $6.7 million position during the quarter. The following funds were also among the new HSY investors: Donald Sussman's Paloma Partners, Paul Marshall and Ian Wace's Marshall Wace, and Philippe Laffont's Coatue Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as The Hershey Company (NYSE:HSY) but similarly valued. These stocks are Autodesk, Inc. (NASDAQ:ADSK), China Unicom (Hong Kong) Limited (NYSE:CHU), Shopify Inc (NYSE:SHOP), and Equity Residential (NYSE:EQR). All of these stocks' market caps resemble HSY's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ADSK,45,2728142,-11 CHU,8,65922,2 SHOP,34,2509650,8 EQR,23,196497,0 Average,27.5,1375053,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $1375 million. That figure was $1104 million in HSY's case. Autodesk, Inc. (NASDAQ:ADSK) is the most popular stock in this table. On the other hand China Unicom (Hong Kong) Limited (NYSE:CHU) is the least popular one with only 8 bullish hedge fund positions. The Hershey Company (NYSE:HSY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HSY wasn't nearly as popular as these 20 stocks and hedge funds that were betting on HSY were disappointed as the stock returned -3.9% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.