Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about TreeHouse Foods Inc. (NYSE:THS).
TreeHouse Foods Inc. (NYSE:THS) was in 17 hedge funds' portfolios at the end of the second quarter of 2019. THS investors should be aware of a decrease in hedge fund interest recently. There were 23 hedge funds in our database with THS holdings at the end of the previous quarter. Our calculations also showed that THS isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are several tools stock market investors can use to value publicly traded companies. Some of the best tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the market by a solid amount (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a glance at the latest hedge fund action regarding TreeHouse Foods Inc. (NYSE:THS).
What have hedge funds been doing with TreeHouse Foods Inc. (NYSE:THS)?
At the end of the second quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -26% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards THS over the last 16 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in TreeHouse Foods Inc. (NYSE:THS), which was worth $40.1 million at the end of the second quarter. On the second spot was AQR Capital Management which amassed $26.9 million worth of shares. Moreover, D E Shaw, Balyasny Asset Management, and GLG Partners were also bullish on TreeHouse Foods Inc. (NYSE:THS), allocating a large percentage of their portfolios to this stock.
Since TreeHouse Foods Inc. (NYSE:THS) has experienced bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there exists a select few hedge funds that decided to sell off their positions entirely in the second quarter. At the top of the heap, David Harding's Winton Capital Management said goodbye to the largest investment of the "upper crust" of funds tracked by Insider Monkey, comprising close to $9.4 million in stock, and Principal Global Investors's Columbus Circle Investors was right behind this move, as the fund said goodbye to about $7.8 million worth. These moves are interesting, as total hedge fund interest was cut by 6 funds in the second quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as TreeHouse Foods Inc. (NYSE:THS) but similarly valued. We will take a look at B2Gold Corp (NYSEMKT:BTG), Delek US Holdings, Inc. (NYSE:DK), The Ensign Group, Inc. (NASDAQ:ENSG), and SINA Corp (NASDAQ:SINA). This group of stocks' market values are similar to THS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BTG,17,145412,1 DK,18,117625,-10 ENSG,14,106736,-3 SINA,19,314481,-5 Average,17,171064,-4.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $171 million. That figure was $142 million in THS's case. SINA Corp (NASDAQ:SINA) is the most popular stock in this table. On the other hand The Ensign Group, Inc. (NASDAQ:ENSG) is the least popular one with only 14 bullish hedge fund positions. TreeHouse Foods Inc. (NYSE:THS) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on THS, though not to the same extent, as the stock returned 2.5% during the third quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.