Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Campbell Soup Company (NYSE:CPB) in this article.
Campbell Soup Company (NYSE:CPB) investors should pay attention to a decrease in support from the world's most elite money managers recently. CPB was in 28 hedge funds' portfolios at the end of the first quarter of 2019. There were 29 hedge funds in our database with CPB positions at the end of the previous quarter. Our calculations also showed that cpb isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a look at the new hedge fund action surrounding Campbell Soup Company (NYSE:CPB).
What have hedge funds been doing with Campbell Soup Company (NYSE:CPB)?
At Q1's end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards CPB over the last 15 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.
Of the funds tracked by Insider Monkey, Third Point, managed by Dan Loeb, holds the number one position in Campbell Soup Company (NYSE:CPB). Third Point has a $800.7 million position in the stock, comprising 8.9% of its 13F portfolio. Coming in second is D E Shaw, led by D. E. Shaw, holding a $36.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions consist of Ken Griffin's Citadel Investment Group, and Israel Englander's Millennium Management.
Due to the fact that Campbell Soup Company (NYSE:CPB) has experienced a decline in interest from hedge fund managers, it's easy to see that there were a few fund managers that elected to cut their entire stakes heading into Q3. It's worth mentioning that Steve Cohen's Point72 Asset Management said goodbye to the largest stake of all the hedgies followed by Insider Monkey, comprising close to $9.9 million in stock, and Ian Simm's Impax Asset Management was right behind this move, as the fund sold off about $7.8 million worth. These moves are important to note, as aggregate hedge fund interest fell by 1 funds heading into Q3.
Let's also examine hedge fund activity in other stocks similar to Campbell Soup Company (NYSE:CPB). These stocks are Apollo Global Management LLC (NYSE:APO), StoneCo Ltd. (NASDAQ:STNE), E*TRADE Financial Corporation (NASDAQ:ETFC), and Raymond James Financial, Inc. (NYSE:RJF). This group of stocks' market values resemble CPB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APO,18,1406351,-4 STNE,23,1735395,3 ETFC,43,1473468,2 RJF,35,794772,10 Average,29.75,1352497,2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $1352 million. That figure was $1033 million in CPB's case. E*TRADE Financial Corporation (NASDAQ:ETFC) is the most popular stock in this table. On the other hand Apollo Global Management LLC (NYSE:APO) is the least popular one with only 18 bullish hedge fund positions. Campbell Soup Company (NYSE:CPB) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately CPB wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CPB investors were disappointed as the stock returned -5.3% 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.