The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded United Natural Foods, Inc. (NASDAQ:UNFI) based on those filings.
United Natural Foods, Inc. (NASDAQ:UNFI) was in 18 hedge funds' portfolios at the end of the first quarter of 2020. UNFI investors should pay attention to an increase in hedge fund sentiment recently. There were 13 hedge funds in our database with UNFI positions at the end of the previous quarter. Our calculations also showed that UNFI 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.
To the average investor there are tons of tools stock traders employ to size up publicly traded companies. A duo of the most useful tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the elite fund managers can beat the market by a significant margin (see the details here).
[caption id="attachment_365194" align="aligncenter" width="400"] David E. Shaw of D.E. Shaw[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. With all of this in mind let's check out the latest hedge fund action surrounding United Natural Foods, Inc. (NASDAQ:UNFI).
Hedge fund activity in United Natural Foods, Inc. (NASDAQ:UNFI)
At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in UNFI a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Intrinsic Edge Capital was the largest shareholder of United Natural Foods, Inc. (NASDAQ:UNFI), with a stake worth $6.9 million reported as of the end of September. Trailing Intrinsic Edge Capital was Millennium Management, which amassed a stake valued at $6.5 million. GMT Capital, Two Sigma Advisors, and Prentice 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 Prentice Capital Management allocated the biggest weight to United Natural Foods, Inc. (NASDAQ:UNFI), around 2.05% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, setting aside 0.91 percent of its 13F equity portfolio to UNFI.
Consequently, key money managers have been driving this bullishness. Intrinsic Edge Capital, managed by Mark Coe, established the most valuable position in United Natural Foods, Inc. (NASDAQ:UNFI). Intrinsic Edge Capital had $6.9 million invested in the company at the end of the quarter. Thomas E. Claugus's GMT Capital also initiated a $5.9 million position during the quarter. The other funds with new positions in the stock are Michael Zimmerman's Prentice Capital Management, D. E. Shaw's D E Shaw, and Cliff Asness's AQR Capital Management.
Let's also examine hedge fund activity in other stocks similar to United Natural Foods, Inc. (NASDAQ:UNFI). These stocks are e.l.f. Beauty, Inc. (NYSE:ELF), PGT Innovations Inc. (NASDAQ:PGTI), Globalstar, Inc. (PINK:GSAT), and Criteo SA (NASDAQ:CRTO). This group of stocks' market values are similar to UNFI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ELF,20,135402,-4 PGTI,14,36577,4 GSAT,12,55702,0 CRTO,13,64427,3 Average,14.75,73027,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $43 million in UNFI's case. e.l.f. Beauty, Inc. (NYSE:ELF) is the most popular stock in this table. On the other hand Globalstar, Inc. (PINK:GSAT) is the least popular one with only 12 bullish hedge fund positions. United Natural Foods, Inc. (NASDAQ:UNFI) is not the most popular stock in this group but hedge fund interest is still above 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 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on UNFI as the stock returned 90.1% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.