After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Cal-Maine Foods Inc (NASDAQ:CALM).
Is Cal-Maine Foods Inc (NASDAQ:CALM) a superb investment right now? Investors who are in the know are in a bearish mood. The number of bullish hedge fund bets were cut by 2 in recent months. Our calculations also showed that CALM isn't among the 30 most popular stocks among hedge funds. CALM was in 16 hedge funds' portfolios at the end of March. There were 18 hedge funds in our database with CALM holdings at the end of the previous quarter.
At the moment there are tons of indicators shareholders have at their disposal to assess their holdings. A couple of the most innovative indicators are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top investment managers can beat the S&P 500 by a significant margin (see the details here).
Let's take a gander at the new hedge fund action regarding Cal-Maine Foods Inc (NASDAQ:CALM).
What have hedge funds been doing with Cal-Maine Foods Inc (NASDAQ:CALM)?
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in CALM 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.
Among these funds, Diamond Hill Capital held the most valuable stake in Cal-Maine Foods Inc (NASDAQ:CALM), which was worth $62.1 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $34.9 million worth of shares. Moreover, Royce & Associates, GLG Partners, and D E Shaw were also bullish on Cal-Maine Foods Inc (NASDAQ:CALM), allocating a large percentage of their portfolios to this stock.
Due to the fact that Cal-Maine Foods Inc (NASDAQ:CALM) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of funds who sold off their full holdings last quarter. Interestingly, Steve Cohen's Point72 Asset Management said goodbye to the biggest investment of the 700 funds tracked by Insider Monkey, totaling close to $6.3 million in stock. Paul Tudor Jones's fund, Tudor Investment Corp, also dropped its stock, about $1.4 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Cal-Maine Foods Inc (NASDAQ:CALM) but similarly valued. These stocks are SeaWorld Entertainment Inc (NYSE:SEAS), Bottomline Technologies (de), Inc. (NASDAQ:EPAY), Pattern Energy Group Inc (NASDAQ:PEGI), and Intelsat S.A. (NYSE:I). This group of stocks' market values match CALM's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SEAS,27,774791,-2 EPAY,15,100438,-2 PEGI,10,24823,-1 I,54,733520,12 Average,26.5,408393,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $408 million. That figure was $170 million in CALM's case. Intelsat S.A. (NYSE:I) is the most popular stock in this table. On the other hand Pattern Energy Group Inc (NASDAQ:PEGI) is the least popular one with only 10 bullish hedge fund positions. Cal-Maine Foods Inc (NASDAQ:CALM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CALM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CALM investors were disappointed as the stock returned -7.4% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.